Question

C D E 2 Although entries have been recorded all year, adjusting entries have not been recorded since December 31, 2018 when the financial statements were last prepared. 3 Refer to the Worksheet (1) tab for unadjusted account balance information as of December 31, 2019. 4 Use the following information to help in preparing adjusting entries for Rochester Enterprise. 6 7 8 9 11 12 w 4i bosi a. On February 1, 2019, Rochester Enterprise had signed a 5% bank loan (refer to the worksheet) due in 4 years. This is the only outstanding note payable. b. Prepaid insurance represents a 6-month insurance policy purchased on November 1, 2019. c. On October 1, 2019, Rochester Enterprise paid $22,140 for a 5-month lease for office space. d Unearned revenue represents a 12-month contract for consulting services. The payment was received on September 1, 2019. e. Supplies on hand total $14,230. f. Equipment is depreciated on a straight-line basis; residual value is estimated to be $25,000 with an estimated service life of 12 years. The assets were held the entire year g. On December 1, Rochester Enterprise issued Greene Supplies an 8-month note receivable at a 6.5% annual interest rate. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The aging schedule of accounts receivable must be completed to determine management's desired balance for 2019. i. Accrued wages totaling $66,789 were unpaid and unrecorded at December 31, 2019. j. Utility costs incurred but unrecorded for the month of December were estimated to be $4,941. 14 15

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Dec 31	Interest Expense	$16,067		($350,550 x 5% x 11/12)
	Interest Payable		$16,067
Dec 31	Insurance Expense	$4,428		($13,284 x 2/6)
	Prepaid Insurance		$4,428
Dec 31	Rent Expense	$13,284		($22,140 x 3/5)
	Prepaid Rent		$13,284
Dec 31	Unearned Revenue	$10,667		($32,000 x 4/12)
	Consulting Revenue		$10,667
Dec 31	Supplies Expense	$41,858		($56,088 - $14,230)
	Supplies		$41,858
Dec 31	Depreciation Expense - Equipment	$41,008		($517,092 - $25,000)/12 years
	Accumulated Depreciation - Equipment		$41,008
Dec 31	Interest Receivable	$993		($183,290 x 6.5% x 1/12)
	Interest Revenue		$993
Dec 31	Bad Debt Expense			(Information not available for this)
	Allowance for doubtful accounts
Dec 31	Salaries & Wages Expense	$66,789
	Salaries & Wages Payable		$66,789
Dec 31	Utilities Expense	$4,941
	Utilities Payable		$4,941