Question
The following information was available on December 31, 2015, the end of ABC Companys annual accounting period. For each of the items below, make ALL
The following information was available on December 31, 2015, the end of ABC Companys annual accounting period. For each of the items below, make ALL NECESSARY journal entries AND adjusting entries. The company adjusts its accounts annually.
During the year, the company agreed to provide certain consulting services to a client for a fee of $10,000, which was received in advance on Jan 1, 2015. At the end of the year, it was estimated that 80% of the services has been provided.
Jan 1. Journal Entry:
Dec 31. Adjusting Entry:
The company rents some surplus space on its building to a tenant for $1,500 per quarter, payable in advance. The agreement began on August 1, 2015, and the tenant paid $1,500 on that date and an additional $1,500 on November 1.
Aug 1 Journal Entry:
Oct 31 Adjusting Entry:
Nov 1.. Journal Entry:
Dec 31.. Adjusting Entry:
Another tenant rents space in the companys building for $600 per month, due on the first day of each month. The agreement began two years ago (on Jan 1, 2014) and the tenant has paid the rent as scheduled every month, except for the most recent one. At the year end, the rent for December 2015 was still outstanding.
Dec 31 .Adjusting Entry:
4. On February 1, 2015, the company purchased a three-year fire insurance policy for $3,600.
Feb 1.. Journal Entry:
Dec 31. Adjusting Entry:
5. On April 1, 2015, the company paid $2,400 to the local newspaper for advertising space. The newspaper agreed to publish ads each month for one year, beginning in April 2015.
April 1 .Journal Entry:
Dec 31 ..Adjusting Entry:
6. On June 1, 2015, the company received $12,000 in advance for a special order which was to be delivered in 2 equal but separate shipments one prior to the end of the current year and the other one to be delivered early in the next year.
June 1.. Journal Entry:
Dec 31 ..Adjusting Entry:
7. On August 1, 2015, the company borrowed $10,000 from a bank and signed a one-year, 12% note. No interest has been paid or recorded yet.
Aug 1.Journal Entry:
Dec 31 ..Adjusting Entry:
8. On October 1, 2015, the company received $6,000 of rent in advance for one year, for storage space that it leases to another company. Rental starts from Nov 1, 2015.
Oct 1. Journal Entry:
Dec 31 ..Adjusting Entry:
9. As of December 31, 2015, employees have earned wages of $775 that the company has not yet paid or recorded.
Dec 31 ..Adjusting Entry:
10. As of December 31, 2015, additional revenue was earned, but not yet collected or recorded totaling $1,300.
Dec 31 ..Adjusting Entry:
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