Drew Carey Company has the following balances in selected accounts on December 31,2010. Accounts Receivable $ 0
Accumulated Depreciation - Equipment 0
Equipment 7000
Interest Payable 0
Notes Payable 10,000
Prepaid Insurance 2,100
Salaries Payable 0
Supplies 2,450
Unearned Consulting Revenue 40,000
All the accounts have normal balances. The information below has been gathered at December31,2010. 1. Drew Carey Company borrowed $10,000 by signing a 12%, one year note on September 1, 2010. 2. A count of supplies on December 31, 2010, indicates that supplies of $800 are on hand. 3. Depreciation on the equipment for 2010 is $1,000. 4. Drew Carey Company paid $2,100 for 12 months of insurance coverage on June 1, 2010. 5. On December 1, 2010, Drew Carey collected $40,000 for consulting services to be performed from December 1, 2010, through March 31, 2010.
Drew Carey performed consulting services for a client in December 2010. The client will be billed $4,200. 7. Drew Carey Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2010.
Instructions: Prepare adjusting entries for the seven items described above.