A review of the ledger of Cullumber Company at December 31, 2020, produces the following data...

A review of the ledger of Cullumber Company at December 31, 2020, produces the following data pertaining to the preparation of annual adjusting entries.

1.	Prepaid Insurance $9,808. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on April 1, 2019, for $7,344. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2020, for $4,300. This policy has a term of 2 years.
2.	Unearned Rent Revenue $436,200. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.

Date	Term (in months)	Monthly Rent	Number of Leases
Nov. 1	9	$5,200	4
Dec. 1	6	$8,300	5

3.	Notes Payable $143,000. This balance consists of a note for 9 months at an annual interest rate of 9%, dated November 1.
4.	Salaries and Wages Payable $0. There are 10 salaried employees. Salaries are paid every Friday for the current week. 5 employees receive a salary of $750 each per week, and 5 employees earn $550 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.

Prepare the adjusting entries at December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Dec. 31

2.	Dec. 31

3.	Dec. 31

4.	Dec. 31

Expert Solution

No.	date	account titles and explanation	debit	credit
1	dec 31	insurance expense	4598
		Prepaid insurance (7344/3)+(4300/2)		4598
		(to recognise insurance expense)

2	dec 31	unearned rent revenue	83100
		Rent revenue (520024)+(830015)		83100

3	dec 31	interest expense	2145
		Interest payable (1430009%2/12)		2145

4	dec 31	salaries and wages expense	2600
		Salaries and wages payable (750/552)+(550/552)		2600

ekkarill92 answered 2 years ago

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