Buzzard Bicycle specializes in custom painting and design of bicycles. December 31 is the company's fiscal year-end. Information necessary to prepare the year-end adjusting entries appears below. 1. A three-year fire insurance policy was purchased on July 1, 2021, for $24,000. The company debited Prepaid Insurance for the entire amount. 2. Employee salaries of $29,000 for the month'of December will be paid in early January. 3. On November 1, 2021, the company received $12,000 in cash from a customer requesting a custom design for six identical bikes ($2,000 each). Deferred Revenue was credited for the entire amount. By the end of the year, four of the bikes have been completed. 4. Supplies at the beginning of the year totaled $6,000. During 2021, additional supplies of $22,000 were purchased, and the entire amount was debited to Supplies. Supplies remaining at the end of the year total $8.000. 5. Buzzard paid a local radio station $16,000 for four months of advertising on December 1, 2021. The advertising will appear evenly over the four-month period. The company debited Prepaid Advertising for the entire amount. 6. Buzzard borrowed $42.000 on March 1. 2021. The principal is due to be paid in five years. Interest is payable each March 1 at an annual rate of 10%. Required: Record the necessary adjusting entries on December 31, 2021. (Do not round intermediate calculations. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Buzzard Bicycle specializes in custom painting and design of bicycles. December 31 is the company's fiscal year-end. Information necessary to prepare the year-end adjusting entries appears below. 1. A three-year fire insurance policy was purchased on July 1, 2021, for $24,000. The company debited Prepaid Insurance for the entire amount. 2. Employee salaries of $29,000 for the month'of December will be paid in early January. 3. On November 1, 2021, the company received $12,000 in cash from a customer requesting a custom design for six identical bikes ($2,000 each). Deferred Revenue was credited for the entire amount. By the end of the year, four of the bikes have been completed. 4. Supplies at the beginning of the year totaled $6,000. During 2021, additional supplies of $22,000 were purchased, and the entire amount was debited to Supplies. Supplies remaining at the end of the year total $8.000. 5. Buzzard paid a local radio station $16,000 for four months of advertising on December 1, 2021. The advertising will appear evenly over the four-month period. The company debited Prepaid Advertising for the entire amount. 6. Buzzard borrowed $42.000 on March 1. 2021. The principal is due to be paid in five years. Interest is payable each March 1 at an annual rate of 10%. Required: Record the necessary adjusting entries on December 31, 2021. (Do not round intermediate calculations. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Buzzard Bicycle specializes in custom painting and design of bicycles. December 31 is the company's fiscal year-end. Information
necessary to prepare the year-end adjusting entries appears below.
1. A three-year fire insurance policy was purchased on July 1, 2021, for $24,000. The company debited Prepaid Insurance for the
entire amount.
2. Employee salaries of $29,000 for the month'of December will be paid in early January.
3. On November 1, 2021, the company received $12,000 in cash from a customer requesting a custom design for six identical bikes
($2,000 each). Deferred Revenue was credited for the entire amount. By the end of the year, four of the bikes have been
completed.
4. Supplies at the beginning of the year totaled $6,000. During 2021, additional supplies of $22,000 were purchased, and the entire
amount was
5. Buzzard paid a local radio station $16,000 for four months of advertising on December 1, 2021. The advertising will appear evenly
over the four-month period. The company debited Prepaid Advertising for the entire amount.
6. Buzzard borrowed $42,000 on March 1, 2021. The principal is due to be paid in five years. Interest is payable each March 1 at an
annual rate of 10%.
bited to Supplies. Supplies remaining at the end of the year total $8,000.
Required:
Record the necessary adjusting entries on December 31, 2021. (Do not round intermediate calculations. If no entry is required for a
particular transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
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A three-year fire insurance policy was purchased on July 1, 2021, for $24,000.
The company debited Prepajd Insurance for the entire amount. Record the
adjusting entry for insurance at its year-end of December 31.
ed
ok
Note: Enter debits before credits.
nces
Date
General Journal
Debit
Credit
December 31
Record entry
Clear entry
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