Question

Below are transactions for Wolverine Company during 2021.

On December 1, 2021, Wolverine receives $3,900 cash from a company that is renting office space from Wolverine. The payment, representing rent for December and January, is credited to Deferred Revenue. Wolverine purchases a one-year property insurance policy on July 1, 2021, for $13,080. The payment is debited to Prepaid Insurance for the entire amount. Employee salaries of $2,900 for the month of December will be paid in early January 2022. On November 1, 2021, the company borrows $14,500 from a bank. The loan requires principal and interest at 12% to be paid on October 30, 2022. Office supplies at the beginning of 2021 total $990. On August 15, Wolverine purchases an additional $3,300 of office supplies, debiting the Supplies account. By the end of the year, $490 of office supplies remains.

Required:

Record the necessary adjusting entries at December 31, 2021, for Wolverine Company. You do not need to record transactions made during the year. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Answer 1

Adjusting Journal Entries

S.No	Details	Debit($)	Credit($)
1	Deferred Revenue	1950
	Rent Revenue		1950
	(Rent Revenue of dec. Recorded (3900/2) )
2	Insurance Expense	6540
	Prepaid Insurance		6540
	(Insurance Expense for the year Recorded [13080/2*6] )
3	Salary Expense	2900
	Salary Payable		2900
	(Salary of Employee made outstanding)
4	Interest Expense	290
	Interest Paybale		290
	(Interest for the year made accured [14500*12%*2/12] )
5	Supplies Expense	3800
	Office Supplies		3800
	(Supplies Adjustment entry recorded [990+3300-490] )