Garrett Wolfe Company has the following balances in selected accounts on December 31, 2012.
Accounts Receivable $ -0-
Accumulated Depreciation—Equipment -0-
Equipment 7,000
Interest Payable -0-
Notes Payable 10,000
Prepaid Insurance 2,100
Salaries and Wages Payable -0-
Supplies 2,450
Unearned Service Revenue 30,000
All the accounts have normal balances. The information below has been gathered at December 31, 2012.
1. Garrett Wolfe Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2012.
2. A count of supplies on December 31, 2012, indicates that supplies of $900 are on hand.
3. Depreciation on the equipment for 2012 is $1,000.
4. Garrett Wolfe Company paid $2,100 for 12 months of insurance coverage on June 1, 2012.
5. On December 1, 2012, Garrett Wolfe collected $30,000 for consulting services to be performed from December 1, 2012, through March 31, 2013.
6. Garrett Wolfe performed consulting services for a client in December 2012. The client will be billed $4,200.
7. Garrett Wolfe 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 2012.
Instructions
Prepare adjusting entries for the seven items described above.