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Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2018, appears below.

   

Account Title	Debits		Credits
Cash	45,300
Accounts receivable	59,000
Supplies	1,900
Inventory	78,000
Note receivable	30,300
Interest receivable	0
Prepaid rent	2,800
Prepaid insurance	0
Office equipment	96,000
Accumulated depreciation—office equipment			36,000
Accounts payable			38,000
Salaries and wages payable			0
Note payable			72,300
Interest payable			0
Deferred revenue			0
Common stock			60,000
Retained earnings			23,500
Sales revenue			238,000
Interest revenue			0
Cost of goods sold	107,100
Salaries and wages expense	20,400
Rent expense	15,400
Depreciation expense	0
Interest expense	0
Supplies expense	1,400
Insurance expense	6,400
Advertising expense	3,800
Totals	467,800		467,800

Information necessary to prepare the year-end adjusting entries appears below.

1. Depreciation on the office equipment for the year is $12,000.

2. Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2018, were $1,700.

3. On October 1, 2018, Pastina borrowed $72,300 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.

4. On March 1, 2018, the company lent a supplier $30,300 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2019.

5. On April 1, 2018, the company paid an insurance company $6,400 for a two-year fire insurance policy. The entire $6,400 was debited to insurance expense.

6. $1,010 of supplies remained on hand at December 31, 2018.

7. A customer paid Pastina $1,980 in December for 1,650 pounds of spaghetti to be delivered in January 2019. Pastina credited sales revenue.

8. On December 1, 2018, $2,800 rent was paid to the owner of the building. The payment represented rent for December 2018 and January 2019, at $1,400 per month.

5. Prepare closing entries. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

6. Prepare a post-closing trial balance.

Answer 1