Question:
Date Transaction
Apr. 1 Purchased a delivery van for $10,000, paying $1,000 down, and issuing a 1-year, 12% note payable for the $9,000 balance. It is estimated that the van has a 4-year life and an $800 residual value; the company uses straight-line depreciation. The interest on the note will be paid on the maturity date.
May 15 Purchased $830 of office supplies.
June 2 Purchased a 2-year comprehensive insurance policy for $960.
Aug. 1 Received 6 months' rent in advance at $260 per month and recorded the $1,560 receipt as Rent Revenue.
Sept. 15 Advanced $600 to sales personnel to cover their future travel costs.
Nov. 1 Accepted a $6,000, 6-month, 12% (annual rate) note receivable from a customer, the interest to be collected when the note is collected.
The following information also is available:
1. On January 1, the Office Supplies account had a $250 balance. On December 31, an inventory count showed $190 of office supplies on hand.
2. The weekly (5-day) payroll of Ardery Company amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day accrual is required for the current year.
3. Sales personnel travel cost reports indicate that $490 of advances had been used to pay travel expenses.
4. The income tax rate is 30% on current income and is payable in the first quarter of next year. The pretax income before the adjusting entries is $8,655.
Required: On the basis of the above information, prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31.