Question

The information necessary for preparing the 2021 year-end adjusting entries for Bearcat Personal Training Academy appears below. Bearcat's fiscal year-end is December 31 1. Depreciation on the equipment for the year is $5.700 2. Salaries eamed (but not paid) from December 16 through December 31, 2021. are $2,700. 3. On March 1, 2021, Bearcat lends an employee $13.500. The employee signs a note requiring principal and interest at 8% to be paid on February 28, 2022 4. On April 1, 2021, Bearcat pays an insurance company $11.640 for a two-year fire insurance policy. The entire $11.640 is debited to Prepaid Insurance at the time of the purchase 5. Bearcat uses $1.050 of supplies in 2021 6. A customer pays Bearcat $2,310 on October 31 2021, for three months of personal training to begin November 1.2021. Bearcat credits Deferred Revenue at the time of cash receipt. 7. On December 1, 2021, Bearcat pays $4.050 rent to the owner of the building. The payment represents rent for December 2021 through February 2022, at $1,350 per month Prepaid Rent is debited at the time of the payment. Required: Record the necessary adjusting entries at December 31, 2021No prior adjustments have been made during 2021. (Do not round intermediate calculations. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Adjusting entry

No	date	General Journal	Debit	Credit
1	Dec 31	Depreciation expense	5700
		Accumulated depreciation		5700
2	Dec 31	Salaries expense	2700
		Salaries payable		2700
3	Dec 31	Interest receivable (13500*8%*10/12)	900
		Interest revenue		900
4	Dec 31	Insurance expense (11640/24*9)	4365
		Prepaid insurance		4365
5	Dec 31	Supplies expense	1050
		Supplies		1050
6	Dec 31	Deferred revenue (2310*2/3)	1540
		Service revenue		1540
7	dec 31	Rent expense	1350
		Prepaid rent		1350