Pk 311 Presented below is information related to Susan Mayer

Pk 3-11 Presented below is information related to Susan Mayer, Realtor, at the end of the fiscal year ending December 3 1 . 1. Susan had paid the local newspaper $335 for an advertisement to be run In January of the next year, charging it to Advertising Expense. 2. On November l Susan borrowed $9,000 frorm HSBC issuing a 90-day 10% note. Salaries and wages due and unpaid December 3 1 : sales $1.420; office clerks, S 1,060. 3. 4. Interest accrued to date on Mike Delfino\'s note which Susan holds, $500. . Estimated loss on bad debts, $1,210 for the period. 6. Stamps and stationery on hand, $110, charged to Stationery and Postage Expense account when purchased 7. Susan has not yet paid the December rent on the building her business occupies $1,000. 8. Insurance paid November 1, for one year, $930, charged to Prepaid Insurance when paid. 9. Property taxes accrued $1,670. 0 On December i susan gave Bree her (Susan\'s) 60-day, 12% note for S6,000 on account. 11. On October 31 Susan received $2,580 from Carlos Solis in payment of 6 months rent for office space occupied by him in the building and credited Unearned Rent Revenue 12. On September 1 she paid 6 months\' rent in advance on a warehouse, S6.600 and debited the account Prepaid Rent. 13. The bill from the Gerbil Power Company for December has been received but not yet entered or paid, $510. 14. Estimated depreciation on furniture and equipment, $1,400. Instructions Prepare all necessary annual adjusting & reversing entries for the year ended December 31 .

Solution

SOLUTION:

		Debit	Credit
1	Prepaid Advertising	335
	Advertising Expense		335
2	Interest Expense	610
	Interest Payable		610
	(9000*10%*61/90days)
3	Salaries and Wages Expense	2,480
	Salaries and Wages Payable		2,480
	(1,420 + 1,060)
4	Interest Receivable	500
	Interest Income		500
5	Bad Debt Expense	1,210
	Allowance for Doubtful Accounts		1,210
6	Supplies	110
	Office Expense		110
7	Rent Expense	1,000
	Rent Payable		1,000
8	Insurance Expense	155
	Prepaid Insurance		155
	(930*2/12)
9	Property Tax Expense	1,670
	Property Tax Payable		1,670
10	Interest Receivable	60
	Interest Income		60
11	Unearned Rent Revenue	860
	Rent Revenue		860
	(2580 * 2/6 months)
12	Rent Expense	2,200
	Prepaid Rent		2,200
	(6,600*4/12 months)
13	Utilities Expense	510
	Accounts Payable		510
14	Depreciation Expense	1,410
	Accumulated Depreciation - Equipment		1,410