Question - The following information is given for Ribbons and Bows prior to adjustments on December 31, 2013. Ribbons and Bows prepares adjusting entries annually on December 31.
a) Salaries of $5,000 are paid every Friday for a five-day workweek ending on Friday. December 31, 2013, is a Thursday.
b) On October 1, 2013, Ribbons and Bows collected $10,000 to be earned evenly over the next five months and credited unearned revenue.
c) Accrued service revenue on December 31 amounts to $1,400.
d) On June 1, 2013, Ribbons and Bows purchased a $4,800, two-year insurance policy and debited an asset account.
e) The supplies account had a January 1, 2013, balance of $2,400. Purchases of supplies during 2013 amounted to $3,500. Supplies on hand December 31, 2013, amount to $800.
Prepare adjusting entries needed on December 31, 2013.