Jaguar Auto Company provides general car maintenance to customers. The company’s fiscal year-end is December 31. The December 31, 2012, trial balance (before any adjusting entries) appears below.
Accounts Debits Credits
Cash $ 17,000
Accounts receivable 14,000
Supplies 22,000
Prepaid insurance 18,000
Equipment 85,000
Accumulated depreciation $ 27,000
Accounts payable 11,000
Salaries payable 0
Utilities payable 0
Interest payable 0
Notes payable 30,000
Common stock 25,000
Retained earnings 9,000
Dividends 2,000
Service revenue 220,000
Salaries expense 153,000
Depreciation expense 0
Insurance expense 0
Supplies expense 0
Utilities expense 11,000
Interest expense 0
Totals $ 322,000 $ 322,000
Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation on the machines for the year is $9,000.
b.
Employee salaries are paid every two weeks. The last pay period ended on December 23. Salaries earned from December 24 through December 31, 2012, are $3,000.
c.
On September 1, 2012, Jaguar borrows $30,000 from a local bank and signs a note. The note requires interest to be paid annually on August 31 at 9%. The principal is due in five years.
d.
On March 1, 2012, the company purchases insurance for $18,000 for a one-year policy to cover possible injury to mechanics. The entire $18,000 is debited to Prepaid Insurance at the time of the purchase.
e. $4,000 of supplies remains on hand at December 31, 2012.
f.
On December 30, Jaguar receives a utility bill of $1,700 for the month. The bill will not be paid until early January 2013, and no entry is recorded when the bill is received.
Required:
Prepare the necessary adjusting entries on December 31, 2012. (Do not round your intermediate calculations. Omit the “$” sign in your response.)
Event General Journal Debit Credit
a.
b.
c.
d.
e.
f.