Question

Prepare journal entries to adjust the books of McGarrett Corp. at December 31, 2013.

-Purchased Machine B used in the factory for $450,000 on July 1, 2010. Machine B has an estimated useful life of 12 years and a residual value of $30,000. McGarrett uses straight-line depreciation.

-Sales for 2013 amounted to $4,000,000, including $600,000 of sales on credit. Bad debt losses are estimated based on actual experience to be .25% of credit sales.

-The dollar value of office supplies inventory at the beginning of 2013 equaled $600. During 2013, office supplies costing $8,800 were purchased. This amount was debited to office supplies expense. The dollar value of the ending inventory was determined to be $400. The January 1 balance of $600 still appears as the balance in the office supplies inventory account.

-On July 1, 2013, the company paid a three-year insurance premium in the amount of $2,160. This amount was debited to insurance expense.

-On October 1, 2013, the company paid rent on some leased office space. The payment of $7,200 cash was for the following six months. The $7,200 payment was debited to rent expense

Can you add side notes for each journal entry please!!

Answer 1