Concept explainers
• LO2–5
Prepare the necessary adjusting entries for Johnstone Controls at the end of its December 31, 2018, fiscal year-end for each of the following situations. No adjusting entries were recorded during the year.
1. On March 31, 2018, the company lent $50,000 to another company. A note was signed with principal and interest at 6% payable on March 31, 2019.
2. On September 30, 2018, the company paid its landlord $12,000 representing rent for the period September 30, 2018, to September 30, 2019.
3. Supplies on hand at the end of 2017 totaled $3,000. Additional supplies costing $5,000 were purchased during 2018 and debited to the supplies account. At the end of 2018, supplies costing $4,200 remain on hand.
4. Vacation pay of $6,000 for the year that had been earned by employees was not paid or recorded. The company records vacation pay as salaries and wages expense.
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Intermediate Accounting
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- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning