Question

Cullumber Company has the following balances in selected accounts on December 31, 2021. Cullumber has a calendar year end.

Accounts Receivable		$	0
Accumulated Depreciation—Equipment			0
Equipment			6,300
Interest Payable			0
Notes Payable			9,300
Prepaid Insurance			2,244
Salaries Payable			0
Supplies			2,400
Unearned Revenue			30,000

All the accounts have normal balances. The information below has been gathered at December 31, 2021.

1.		Cullumber Company borrowed $9,300 by signing a 4%, one-year note on September 1, 2021.
2.		A count of supplies on December 31, 2021, indicates that supplies of $820 are on hand.
3.		Depreciation on the equipment for 2021 is $770.
4.		Cullumber Company paid $2,244 for 12 months of insurance coverage on June 1, 2021.
5.		On December 1, 2021, Cullumber collected $34,200 for consulting services to be performed evenly from December 1, 2021, through March 31, 2022.
6.		Cullumber performed consulting services for a client in December 2021. The client will be billed $3,000. Payment from the customer is expected on January 14, 2022.
7.		Cullumber Company pays its employees total salaries of $10,000 every Wednesday for the preceding five-day week (Monday through Friday). On Wednesday, January 5, 2022, employees were paid for the last five weekdays of 2021.

Prepare adjusting entries for the seven items described above

(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Dec. 31
2.	Dec. 31
3.	Dec. 31
4.	Dec. 31
5.	Dec. 31
6.	Dec. 31
7.	Dec. 31

  Prepare the appropriate subsequent cash entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Aug. 31
6.	Aug. 31Jan. 5Jan. 14
7.	Aug. 31Jan. 5Jan. 14

Answer 1

No.	Date	Accounts Titles and Explanation	Debit	Credit
1	Dec 31	Interest Expense	$124		($9,300 x 4% x 4/12)
		Interest Payable		$124
2	Dec 31	Supplies Expense	$1,580		($2,400 - $820)
		Supplies		$1,580
3	Dec 31	Depreciation Expense	$770
		Accumulated Depreciation		$770
4	Dec 31	Insurance Expense	$1,309		($2,244 x 7/12)
		Prepaid Insurance		$1,309
5	Dec 31	Unearned Revenue	$8,550		($34,200 x 1/4)
		Service Revenue		$8,550
6	Dec 31	Accounts Receivable	$3,000
		Service Revenue		$3,000
7	Dec 31	Salaries Expense	$10,000
		Salaries Payable		$10,000
No.	Date	Accounts Titles and Explanation	Debit	Credit
1	Aug 31	Interest Payable	$124
		Interest Expense	$248
		Notes Payable	$9,300
		Cash		$9,672
6	Jan 14	Cash	$3,000
		Accounts Receivable		$3,000
7	Jan 5	Salaries Payable	$10,000
		Cash		$10,000