Problem 2-8 (Algo) Adjusting entries [LO2-6]

Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2024, appears below. December 31 is the companys reporting year-end. The company uses the perpetual inventory system.

Account Title	Debits	Credits
Cash	$ 33,300
Accounts receivable	33,500
Supplies	3,000
Prepaid rent	24,000
Inventory	75,000
Office equipment	69,750
Accumulated depreciation		$ 11,000
Accounts payable		27,100
Salaries payable		4,000
Notes payable		40,000
Common stock		90,000
Retained earnings		20,800
Dividends	8,000
Sales revenue		199,000
Cost of goods sold	105,000
Interest expense	0
Salaries expense	33,350
Rent expense	0
Supplies expense	0
Utilities expense	7,000
Totals	$ 391,900	$ 391,900

Information necessary to prepare the year-end adjusting entries appears below.

1. The office equipment was purchased in 2022 and is being depreciated using the straight-line method over a 9-year useful life with no residual value.
2. Accrued salaries at year-end should be $6,000.
3. The company borrowed $40,000 on September 1, 2024. The principal is due to be repaid in 9 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 12%.
4. The company debits supplies when supplies are purchased. Supplies on hand at year-end cost $600.
5. Prepaid rent expired during the period is $14,000.

Required:

Prepare the necessary December 31, 2024, adjusting entries.

Problem 2-8 (Algo) Adjusting entries [LO2-6] Excalibur Corporation solls video games for personal computers. The unadjusted trial balance as of December 31,2024 , appears below December 31 is the company's reporting year-end The company uses the perpetual inventory system. Information necessary to prepare the year-end adjusting entries appears below 1. The office equipment was purchased in 2022 and is being depreciated using the straight-ine method over a 9 year useful life with no residual value 2. Accrued salaries at year-end should be $6,000 3. The company borrowed $40,000 on September 1, 2024. The principal is due to be repaid in 9 years interest is payable twice a year on each August 31 and February 28 at an annual rate of 12%. 4. The company debits supplies when supplies are purchased. Supplies on hand at year-end cost $600 5. Prepaid rent expired during the period is $14,000 Required: Prepare the necessary December 31, 2024, adjusting entries Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Journal entry worksheet The office equipment was purchased in 2022 and is being depreciated using the straight-line method over a nine-year useful life with no residual value. Prepare the necessary adjusting entry on December 31,2024