Question
Question 9.) Prepare the appropriate December 31, 2019, adjusting entry for each item a. On September 1, 2019, a three-year comprehensive insurance policy was purchased
Question 9.) Prepare the appropriate December 31, 2019, adjusting entry for each item
a. On September 1, 2019, a three-year comprehensive insurance policy was purchased for $1,800. The payment was debited to Prepaid Insurance.
b. On December 1, 2019, a customer paid $3,500 in advance for services to be performed in January 2020. The payment was credited to Unearned Revenue.
c. On January 1, 2019, the office supplies account had a $1,000 balance. Supplies costing $2,500 were purchased during the year. At December 31, an inventory count showed $500 of supplies on hand.
d. On December 31, 2019, $3,800 of unpaid employee salaries had accumulated. No entry for these salaries have been made.
e. Straight-lone depreciation is being recorded annually on a building that was purchased at the beginning of 2016 for $60,000, with an expected life of 20 years and estimated residual of $5,000.
f. The income tax rate is 25% on current income. Pretax income before the above adjusting entries was $63,000.
Required: Prepare the appropriate December 31, 2019, adjusting entry for each item, or indicate that an adjusting entry is not necessary. Assume that the transactions were recorded in permanent (balance sheet) accounts unless otherwise indicated.
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