Problem - Lorring Landscaping has the following data for the December 31 adjusting entries:
a. Each Friday, Lorring pays employees for the current week's work. The amount of the weekly payroll is $6,000 for a five-day workweek. This year, December 31 falls on a Tuesday.
b. On January 1 of the current year, Lorring purchases an insurance policy that covers two years, $4,000.
c. The beginning balance of Office Supplies was $4,100. During the year, Lorring purchased office supplies for $5,500, and at December 31 the office supplies on hand total $2,200.
d. During December, Lorring designed a landscape plan and the client prepaid $4,000. Lorring recorded this amount as Unearned Revenue. The job will take several months to complete, and Lorring estimates that the company has earned 50% of the total revenue during the current year.
e. At December 31, Lorring had earned $4,500 for landscape services completed for Tomball Appliances.
f. Depreciation for the Equipment is $3,000.
g. Lorring has incurred $800 of advertising expense to be paid on January 10.
Requirements - Journalize the adjusting entry needed on December 31.