Reference no: EM132628713
The following information is available for M&M Johnson Inc.:
a. The December 31, 2017, supplies inventory balance is $85,000. A count of supplies reveals that the company actually has $30,000 of supplies on hand.
b. As of December 31, 2017, Johnson Inc. had not paid the rent for December. The monthly rent is $2,400.
c. On December 20, 2017, Johnson collected $18,000 in customer advances for the subsequent performance of a service. Johnson recorded the $18,000 as unearned revenue, and as of December 31 two-thirds of the service had been performed.
d. The total cost of Johnson's fixed assets is $500,000. Johnson estimates that the assets have a useful life of ten years and uses the straight-line method of depreciation.
e. Johnson borrowed $10,000 at an annual rate of 12 percent on July 1, 2017. The first interest payment will be made on January 1, 2018.
f. Johnson placed several ads in local newspapers during December. On December 31, the company received a $28,000 bill for the ads, which was not recorded at that time.g.On July 1, 2017, Johnson paid the premium for a one-year life insurance policy. The $350 cost of the premium was capitalized when paid.
Problem 1: Prepare the adjusting journal entries necessary on December 31, 2017.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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