Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2016, appears below. Account Title Debits Credits
Cash 30,000
Accounts receivable 40,000
Supplies 1,500
Inventory 60,000
Note receivable 20,000
Interest receivable 0
Prepaid rent 2,000
Prepaid insurance 0
Office equipment 80,000
Accumulated depreciation–office equipment 30,000
Accounts payable 31,000
Salaries and wages payable 0
Note payable 50,000
Interest payable 0
Deferred revenue 0
Common stock 60,000
Retained earnings 24,500
Sales revenue 148,000
Interest revenue 0
Cost of goods sold 70,000
Salaries and wages expense 18,900
Rent expense 11,000
Depreciation expense 0
Interest expense 0
Supplies expense 1,100
Insurance expense 6,000
Advertising expense 3,000
Totals 343,500 343,500
Information necessary to prepare the year-end adjusting entries appears below.
1. Depreciation on the office equipment for the year is $10,300.
2. Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2021, were $1,500.
3. On October 1, 2021, Pastina borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
4. On March 1, 2021, the company lent a supplier $20,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
5. On April 1, 2021, the company paid an insurance company $6,000 for a two-year fire insurance policy. The entire $6,000 was debited to insurance expense.
6. $800 of supplies remained on hand at December 31, 2021.
7. A customer paid Pastina $2,000 in December for 1,500 pounds of spaghetti to be delivered in January 2022. Pastina credited sales revenue.
8. On December 1, 2021, $2,000 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022, at $1,000 per month.
Required:
Post the unadjusted balances and adjusting entires into the appropriate t-accounts. (Enter the number of the adjusting entry in the column next to the amount. Do not round intermediate calculations.)