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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.

FINANCIAL ACCOUNTING
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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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.

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: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.
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
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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