Reference no: EM132031108
Problem - Verne Cova Company has the following balances in selected accounts on December 31, 2014.
Accounts Receivable $ 0
Accumulated Depreciation-Equipment 0
Equipment 7,407
Interest Payable 0
Notes Payable 10,297
Prepaid Insurance 2,400
Salaries and Wages Payable 0
Supplies 2,665
Unearned Service Revenue 40,368
All the accounts have normal balances. The information below has been gathered at December 31, 2014.
1. Verne Cova Company borrowed $9,950 by signing a 12%, one-year note on September 1, 2014.
2. A count of supplies on December 31, 2014, indicates that supplies of $911 are on hand.
3. Depreciation on the equipment for 2014 is $1,609.
4. Verne Cova Company paid $2,400 for 12 months of insurance coverage on June 1, 2014.
5. On December 1, 2014, Verne Cova collected $32,000 for consulting services to be performed from December 1, 2014, through March 31, 2015.
6. Verne Cova performed consulting services for a client in December 2014. The client will be billed $3,666.
7. Verne Cova Company pays its employees total salaries of $5,520 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 2014.
Prepare adjusting entries for the seven items described above.