Question: When the accounts of Daniel Barenboim Inc. are examined, the adjusting data listed below are uncovered on December 31, the end of an annual fiscal period.
1. The prepaid insurance account shows a debit of $18,000, representing the cost of a 3-year fire insurance policy dated May 1 of the current year. Record the used portion of prepaid insurance at Dec. 31.
2. On October 1, Unearned Rent Revenue was credited for $6,000, representing advance rent from a tenant for a 4-month period beginning on that date ($1,500 per month). Record the earned portion of rent at Dec. 31
3. Purchase of advertising materials for $8,100 during the year was recorded in the Advertising Supplies account. On December 31, advertising materials of $3,250 are on hand. Record the used portion of supplies at Dec. 31.
4. Record interest on notes payable of $250,000 with an annual rate of 6%. The note was taken out on August 1 of this year.
5. The last payroll date was Friday, December 27th. Employees work Monday through Friday and are paid every two weeks on Friday. The per-day labor cost is $3,100. Record the payroll accrual on Tuesday, December 31st.
6. Equipment costing $800,000 with an estimated salvage value of $50,000 was purchased 3 years ago. The estimated useful life of the equipment is 15 years. Record straight-line depreciation for the current year ended Dec. 31.
Required: Prepare journal entries for the above adjustments at December 31 of the current year. No adjustments were made during the year.