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Wonderland Shows (WS) is owned by Maryann Marine. On January 12, 2021, one month before the company had to provide their financial statements to the bank, the bookkeeper quit because she won the lottery. She had completed all adjusting entries up to Sept. 30, 2020 in order to prepare the financial statements for the nine months ending Sept. 30, 2020. Ms. Marine knows that you are a hard working student at Ryersons School of Accounting and Finance and very knowledgeable in this area. She has asked you to prepare the necessary adjusting entries for the year ending December 31, 2020 based on the information provided below. All the other adjusting entries for the year ending December 31 have already been completed. Must Show all calculations for your adjusting entry or entries in the boxes below

1. The Prepaid Insurance balance at Sept. 30, 2020 was $3,600, for a policy with 9 months coverage remaining on the policy. On Oct. 1, 2020, a 24-month policy costing $12,000 was charged to Prepaid Insurance. On October 1, WS purchased a 12-month policy for $4,200 and the amount was charged to Insurance Expense. The current balance in Insurance Expense is $9,900.

2. Majestic received the bank statement from CIBC for Decembers activities in January of 2021. The bank deducted a service charge of $45 in error. Further, the bank deducted interest on the outstanding line of credit of $750, representing interest charges on the line of credit for the three months ending December 31, 2020.
3. The Allowance for doubtful accounts has a credit balance of $2,500. The balance in Accounts Receivable is $105,000 and Majestic has reviewed all the accounts and has determined that approximately $7,500 are unlikely to be collected.

At Sept. 30, 2020, the supplies inventory account has a balance of $0. During the last three months, purchases of supplies, totaling $15,000, were all put to supplies inventory account. An inventory count of supplies at December 31, 2020 show $12,900 of supplies were remaining.

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