Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2024, appears below. Account Title Debits Credits Cash $ 32,600 Accounts receivable 41,000 Supplies 2,000 Inventory 61,000 Notes receivable 21,000 Interest receivable 0 Prepaid rent 1,400 Prepaid insurance 7,000 Office equipment 84,000 Accumulated depreciation $ 31,500 Accounts payable 32,000 Salaries payable 0 Notes payable 51,000 Interest payable 0 Deferred sales revenue 2,500 Common stock 67,000 Retained earnings 31,000 Dividends 5,000 Sales revenue 151,000 Interest revenue 0 Cost of goods sold 75,000 Salaries expense 19,400 Rent expense 11,500 Depreciation expense 0 Interest expense 0 Supplies expense 1,600 Insurance expense 0 Advertising expense 3,500 Totals $ 366,000 $ 366,000 Information necessary to prepare the year-end adjusting entries appears below. Depreciation on the office equipment for the year is $10,500. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2024, were $1,000. On October 1, 2024, Pastina borrowed $51,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years. Prepare the necessary December 31, 2024, adjusting journal entries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2024, appears below.

Account Title	Debits	Credits
Cash	$ 32,600
Accounts receivable	41,000
Supplies	2,000
Inventory	61,000
Notes receivable	21,000
Interest receivable	0
Prepaid rent	1,400
Prepaid insurance	7,000
Office equipment	84,000
Accumulated depreciation		$ 31,500
Accounts payable		32,000
Salaries payable		0
Notes payable		51,000
Interest payable		0
Deferred sales revenue		2,500
Common stock		67,000
Retained earnings		31,000
Dividends	5,000
Sales revenue		151,000
Interest revenue		0
Cost of goods sold	75,000
Salaries expense	19,400
Rent expense	11,500
Depreciation expense	0
Interest expense	0
Supplies expense	1,600
Insurance expense	0
Advertising expense	3,500
Totals	$ 366,000	$ 366,000

Information necessary to prepare the year-end adjusting entries appears below.

Depreciation on the office equipment for the year is $10,500.
Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2024, were $1,000.
On October 1, 2024, Pastina borrowed $51,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.

Prepare the necessary December 31, 2024, adjusting journal entries.

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