The following transactions occurred for the Microchip Company.1. On October 1, 2021, Microchip lent $98,000 to another company. A note was signed with principal and 9% interest to be paid onSeptember 30, 2022.2. On November 1, 2021, the company paid its landlord $11,700 representing rent for the months of November through January.Prepaid rent was debited.3. On August 1, 2021, collected $17,700 in advance rent from another company that is renting a portion of Microchip's factory. The$17,700 represents one year's rent and the entire amount was credited to deferred rent revenue.4. Depreciation on office equipment is $6,400 for the year.5. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $9,900. The company recordsvacation pay as salaries expense.6. Microchip began the year with $3,900 in its asset account, supplies. During the year, $8,400 in supplies were purchased anddebited to supplies. At year-end, supplies costing $4,200 remain on hand.Prepare the necessary adjusting entries at December 31, 2021 for each of the above situations. Assume that no financial statementswere prepared during the year and no adjusting entries were recorded. (If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field.)View transaction listView journal entry worksheet......NoTransactionGeneral JournalDebitCredit1Interest receivable8,820Interest receivable8,820

Answered: llowing transactions occurred for the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following transactions occurred for the Microchip Company.
1. On October 1, 2021, Microchip lent $98,000 to another company. A note was signed with principal and 9% interest to be paid on
September 30, 2022.
2. On November 1, 2021, the company paid its landlord $11,700 representing rent for the months of November through January.
Prepaid rent was debited.
3. On August 1, 2021, collected $17,700 in advance rent from another company that is renting a portion of Microchip's factory. The
$17,700 represents one year's rent and the entire amount was credited to deferred rent revenue.
4. Depreciation on office equipment is $6,400 for the year.
5. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $9,900. The company records
vacation pay as salaries expense.
6. Microchip began the year with $3,900 in its asset account, supplies. During the year, $8,400 in supplies were purchased and
debited to supplies. At year-end, supplies costing $4,200 remain on hand.
Prepare the necessary adjusting entries at December 31, 2021 for each of the above situations. Assume that no financial statements
were prepared during the year and no adjusting entries were recorded. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
View journal entry worksheet
......
No
Transaction
General Journal
Debit
Credit
1
Interest receivable
8,820
Interest receivable
8,820

Expert Solution

Step 1

The procedure of entering commercial transactions for the first time in the books of accounts is known as journal entry. Adjusting entries, closing entries, and regular entries are examples of diary entries. Journal entries serve as the foundation for further accounting tasks such as ledger account preparation, trial balances, financial statements, and so on. The initial, meticulous recording of all monetary business transactions is called a journal entry. They are listed in chronological sequence based on the date of the incident. Adjusting entries, closing entries, and regular entries are examples of diary entries.

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