Prepare Year-End Adjusting Entries for Each of the Following Situations

question 169

Essay

Prepare year-end adjusting entries for each of the following situations.
a. The Office Supplies account showed a beginning debit balance of $600 and purchases of $1,000. The ending debit balance was $400.
b. Depreciation on buildings is estimated to be $7,600.
c. A one-year insurance policy was purchased for $6,000. Four months have passed since the purchase.
d. Accrued interest on notes payable amounted to $1,500.
e. The company received a $14,400 advance payment during the year on services to be performed. By the end of the year, two-thirds of the services had been performed.
f. Payroll for the five-day workweek, to be paid on Friday, is $14,000. The last day of the period is a Wednesday.
g. Services totaling $780 had been performed but not yet billed or recorded.

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Definitions:

Employment Setting

Refers to the place or context in which employment occurs, including physical locations, organizational environments, and remote or virtual workplaces.

Bilateral Contract

A bilateral contract is an agreement in which each of the two parties makes a promise to the other, creating mutual obligations.

Consideration

In contract law, a benefit or something of value that is exchanged between parties to a contract, making the agreement legally binding.

Contracting Party

An entity or individual that enters into a legal contract or agreement.