PARRISH 4-7/4-8/HOMEWORK ADJUSTING ENTRIES Please read the transactions below and show what adjusting entries need to be made, if any, on each transaction.  Please respond in the same format as the question are asked.  Ex:  Cash     1000                                                      Accounts Payable  1000 a) To record depreciation on the company truck for one year.  The truck's original cost was $12,200, with a $1,000 salvage value and an estimated life of four years.  (ALSO PLEASE EXPLAIN HOW SALVAGE VALUE IS USED) c) To record one month of itnerest expense.  The compnay borrowed $12000 for two years at 5% interest per year.  Interest is due every 6  months.  (Please explain and show the interest and interest due dates affect the adjusting entry) 4-8 a) The office equipment is brand new, having been purchased only one year ago for $5000.  Since it is expected to last 5 years and have a salvage value of $1000 the bookkeeper has decided that it really shows so little wear that depreciation need not to be taken this year. b) The company advertised in the local paper in the last month.  When the bill was paid at the first of last month, the Prepaid Advertising Account was debited. Amount to use is $700 e) Money borrowed from the bank carries and interest rate of 6% per year.  Interest was last paid a month ago and is due again in another five months. The amount borrowed is $20000 1) To record one year’s interest on a loan to an officer of the company. The loan was for $10,000 at 7% annual interest. 2) A customer paid us $600 in advance for merchandise to be shipped to him. At the time the check was received, the Unearned Revenue account was credited. The shipping clerk tell us that one-third of the merchandise has been shipped and received by the customer. 3) Interest on a loan at the bank is due as of Nobember 1.  We borrowed the $5000 three months ago at 6% annual interest.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PARRISH 4-7/4-8/HOMEWORK ADJUSTING ENTRIES

Please read the transactions below and show what adjusting entries need to be made, if any, on each transaction.  Please respond in the same format as the question are asked.  Ex:  Cash     1000

                                                     Accounts Payable  1000

a) To record depreciation on the company truck for one year.  The truck's original cost was $12,200, with a $1,000 salvage value and an estimated life of four years.  (ALSO PLEASE EXPLAIN HOW SALVAGE VALUE IS USED)

c) To record one month of itnerest expense.  The compnay borrowed $12000 for two years at 5% interest per year.  Interest is due every 6  months.  (Please explain and show the interest and interest due dates affect the adjusting entry)

4-8

a) The office equipment is brand new, having been purchased only one year ago for $5000.  Since it is expected to last 5 years and have a salvage value of $1000 the bookkeeper has decided that it really shows so little wear that depreciation need not to be taken this year.

b) The company advertised in the local paper in the last month.  When the bill was paid at the first of last month, the Prepaid Advertising Account was debited. Amount to use is $700

e) Money borrowed from the bank carries and interest rate of 6% per year.  Interest was last paid a month ago and is due again in another five months. The amount borrowed is $20000

1) To record one year’s interest on a loan to an officer of the company. The loan was for $10,000 at 7% annual interest.

2) A customer paid us $600 in advance for merchandise to be shipped to him. At the time the check was received, the Unearned Revenue account was credited. The shipping clerk tell us that one-third of the merchandise has been shipped and received by the customer.

3) Interest on a loan at the bank is due as of Nobember 1.  We borrowed the $5000 three months ago at 6% annual interest.

 

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