70.2K

Verified Solution

Link Copied!

Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Rowling Corporation. Include an explanation for each entry.

a. The details of Prepaid Insurance are as follows: Prepaid Insurance Jan 1 Bal 2,000 Mar 31 3,000 Rowling prepays insurance on March 31 each year. At December 31, $400 is still prepaid. b. Rowling pays employees each Friday. The amount of the weekly payroll is $5,600 for a five-day work week. The current accounting period ends on Tuesday. c. Rowling has a note receivable. During the current year, Rowling has earned accrued interest revenue of $700 that it will collect next year. d. The beginning balance of supplies was $3,200. During the year, Rowling purchased supplies costing $6,100, and at December 31 supplies on hand total $2,100. e. Rowling is providing services for Sting Ray Investments, and the owner of Sting Ray paid Rowling an annual service fee of $10,500. Rowling recorded this amount as Unearned Service Revenue. Rowling estimates that it has earned 70% of the total fee during the current year. f. Depreciation for the current year includes Office Furniture, $4,100, and Equipment, $5,300. Requirement 1. Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Rowling Corporation. Include an explanation for each entry. a. Details of the Prepaid Insurance account reveal a January 1 (beginning of the year) debit balance of $2,000 and a debit to the account on March 31 for $3,000 to record the payment of an annual insurance premium. At December 31, $400 is still prepaid. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Journal Entry Accounts and Explanation Debit Credit Date Dec 31 Rowling pays employees each Friday. The amount of the weekly payroll is $5,600 for a five-day work week. The current accounting period ends on a Tuesday. Journal Entry Accounts and Explanation Debit Credit Date Dec 31 Rowling has a note receivable. During the current year, Rowling has earned accrued interest revenue of $700 that it will collect next year. Journal Entry Accounts and Explanation Debit Credit Date Dec 31 d. The beginning balance of supplies was $3,200. During the year, Rowling purchased supplies for $6,100, and at December 31 the supplies on hand total $2,100. Journal Entry Accounts and Explanation Debit Credit Date Dec 31 Rowling is providing services for Sting Ray Investments, and the owner of Stina Rav paid Rowling $10,500 as the annual service fee. Rowling recorded this amount as Unearned Service Revenue. Rowling estimates that it has earned 70% of the total fee during the current year. Journal Entry Date Accounts and Explanation Debit Credit Dec 31 f. Depreciation for the current year includes Office Furniture, $4,100, and Equipment, $5,300. (Make one journal entry for all depreciation.) Journal Entry Accounts and Explanation Dec 31 Date Debit Credit

Answer & Explanation Solved by verified expert

See Answer