Reference no: EM133038056

Question - ABC Company, adjusts its accounts monthly and closes its accounts annually on December 31. The following information is available as a source for preparing the adjusting entries at December 31, 2020:

1. An eight-month bank loan in the amount of $12,000 had been obtained on October 1. Interest is to be computed at an annual rate of 8 percent.

2. Depreciation on buildings is based on a 20-year life. The original cost of the buildings was $720,000.

3. Salaries earned by employees that have not yet been paid amount to $1,515.

4. Records show that $800 of cash receipts originally recorded as unearned revenue had been earned as of December 31.

5. On October 1, 2020 the company paid $9,000 for rent through March 31, 2021.

Required - Pass the necessary adjusting entries.