Problem #2: Year-End Adjusting Entries (54 points) Gandee Candy, a wholesale distributor of penny candy and other novelties, is a calendar-year corporation. The Company also provides consulting services under various types of contracts to purveyors of its products, The Company records adjusting entries annually immediately prior to preparing its GAAP financial statements. Required: Presented below are seven fact sets that require adjusting entries at December 31, 2020. Some fact sets also require you to prepare regular journal entries. Analyze the facts provided and prepare the required journal entries and the appropriate adjusting entries in proper general journal form. You must clearly present supporting calculations when requested. An unsupported correct answer will receive a deduction of two points. Throughout this problem you will record journal entries involving cash. I did not provide T-accounts for cash. Therefore, you will not post the cash portion of the entries. You should only use these accounts from the chart of accounts of Gandee Candy: Accounts Receivable Interest Expense Office Supplies Expense Accounts Payable Interest Receivable Prepaid Advertising Accumulated Depreciation Interest Revenue Prepaid Insurance Advertising Expense Interest Payable Prepaid Rent Cash Notes Payable Prepaid Salaries Consulting Revenue Notes Receivable Rent Revenue Deferred Consulting Revenue Office Equipment Salaries Expense Depreciation Expense Office Equipment Expense Salaries Payable Insurance Expense Office Supplies Be aware that you will not use every account listed above in your entries. Fact Set #1 (8 points) At December 31, 2020, Gandee Candy determined that it owed its employees $52,630 for their services used by the Company in December 2020 to be paid on January 10, 2021. Prepare the required adjusting journal entry to record the salaries. Post the entry to the applicable T- account(s). (2 points) ADJUSTING ENTRY: DATE ACCOUNT NAMES DEBIT CREDIT Page 7 of 1 Individual Homework #2 Page 10 of 17 Salaries Payable Salaries Expense $511,920 Unad Bali Indicate the names of the accounts and their balances from above that Gandee Candy would report in its GAAP financial statements for fiscal year 2020. DO NOT INCLUDE CASH. (2 points) Balance Sheet at December 31, 2020: Amount Current Liabilities: Income Statement for the year ended December 31, 2020: Amount On January 10, 2021, Gandee Candy issued paychecks to its employees totaling $75,310 in payment of their services used in December 2020 and early January 2021. (4 points) DATE ACCOUNT NAMES DEBIT CREDIT