Reference no: EM132986403

Problem 1: Prepare the necessary adjusting entries at December 31, 2011, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded.

1. Depreciation on machinery is $2400 for the year. (Example)

2. On October 1, 2011, Microchip lent $91000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2012.

3. On November 1, 2011, the company paid its landlord $6300 representing rent for the months of November through January. Prepaid rent was debited.

4. On August 1, 2011, collected $15,500 in advance rent from another company that is renting a portion of Microchip's factory. The $15500 represents one year's rent.

5. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $7200.

6. Microchip began the year with $1600 in its asset account, supplies. During the year, $6000 in supplies were purchased and debited to supplies. At year-end, supplies costing $2906 remain on hand.