Prepare adjusting journal entries for the month of December. The insurance policy is for 1 year. List the debit entries before credit entries. If no entry is required, select No Entry.
Prepare adjusting journal entries for the month of December. The insurance policy is for 1 year. List the debit entries before credit entries. If no entry is required, select No Entry.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Prepare
Transcribed Image Text:As of December 31, Cookie Creations' year-end, the following adjusting entry data are provided.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
A count reveals that $45 of brochures and posters (supplies) were used.
Depreciation is recorded on the baking equipment purchased in November. The baking equipment
has a useful life of 5 years. Assume that 2 months' worth of depreciation is required.
Amortization (which is similar to depreciation) is recorded on the website. (Credit the Website
account and debit Amortization Expense for the amount of the amortization.) The website is
amortized over a useful life of 2 years and was available for use on December 1.
Interest on the 9% note payable is accrued. (Assume that 1.5 months of interest accrued during
November and December.)
One month's worth of insurance has expired.
Natalie is unexpectedly telephoned on December 28 to give a cookie class at the neighborhood
community center on December 31. In early January Cookie Creations sends an invoice for $450 to
the community center.
A count reveals that $1,025 of baking supplies were used.
A cell phone invoice is received for $75. The invoice is for services provided during the month of
December and is due on January 15.
Because the cookie-making class occurred unexpectedly on December 31 and is for such a large
group of children, Natalie's assistant helps out. Her assistant worked 7 hours at a rate of $8 per
hour,
An analysis of the Unearned Service Revenue account reveals that two of the five classes paid for
by the local school board on December 9 still have not been taught by the end of December. The
$60 deposit received on December 19 for another class also remains unearned.
Transcribed Image Text:The trial balance from November is shown below.
COOKIE CREATIONS INC.
Trial Balance
November 30, 2025
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Website
Accounts Payable
Unearned Service Revenue
Notes Payable
Common Stock
Service Revenue
Utilities Expense
Debit
$340
300
220
1,200
1.200
600
50
Credit
$650
60
2,000
800
400
$3,910 $3,910
Expert Solution
Step 1
Adjustment Journal Entry
A general ledger entry known as a "adjustment journal entry" is made at the conclusion of an accounting period to report any unrealized income or costs during the time. An adjusting journal entry is necessary to correctly account for a transaction that began in one accounting period and ended in another. Adjusting journal entries can also be used to describe financial statements that fixes an error from a prior accounting period.
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