Reference no: EM132626759

Baker Company uses an annual reporting period that ends on December 31. The following information concerns adjustments on that date:

1. Office Supplies started off the year with a $5,000 balance. During the year an additional $14,250 was purchased. At the year end a physical inventory of Office Supplies shows $6,050 remaining.
2. The company prepaid $12,000 for a 24-month insurance policy on January 1.
3. The company has 10 employees who earn a total of $2,100 in salaries each working day. They are paid each Monday for the five-day work week ending on the previous Friday. December 31 is a Tuesday, and all 10 employees worked the first two days of the week. The employees will receive their next pay on Monday, January 6, 2014.
4. The company purchased a building on January 1 for $821,000. The building is expected to have a 25-year life, and a salvage value of $25,000.
5. The company rented space in the building to a client. The tenant is charged $1,100 per month beginning on November 1. The rent was paid in November, however it was not paid in December. The tenant has agreed to pay both the December and January rent by January 15, 2014.
6. On November 1 the company rented space to another tenant. This tenant is charged $900 per month. This tenant paid five months rent in advance on November 1.

Required:

Problem 1: Make an adjusting journal entries for each item as of December 31, 2013.

Problem 2: Make an adjusting any necessary subsequent journal entries for 2014.