Chapter 3, Problem 3.32BE

LO 3

(Learning Objective 3: Adjust the accounts) Thornton Company faced the following situations. Journalize the adjusting entry needed at December 31,2020, for each situation. Consider each fact separately.

1. a. The business has interest expense of $3,800 that t must pay early in January 2021.
2. b. Interest revenue of $4,300 has beer, earned but not yet received.
3. c. On July 1, 2020 when the business collected $12,600 rent in advance, it debited Cash and credited Unearned Rent Revenue. The tenant was paying 'or two years rent.
4. d. Salary expense is $6,500 per day—Monday through Friday—and the business pays employees each Friday. This year, December 31 falls on a Thursday.
5. e. The unadjusted balance of the Supplies account is $3,300. The total cost of supplies on hand is $1,200.
6. f. Equipment was purchased on January 1 of this year at a cost of $60,000. The equipment's useful life is five years There is no residual value. Record depreciation for the year and then determine the equipment s book value.