Reference no: EM132513761

The financial year for Drip Dry Cleaning Services ends on 30 June. Using the following information, make the necessary adjusting entries at year-end. Ignore GST. Ignore Narration.

Point 1. On 15 February, Danielle Drip's business borrowed $16 000 from Northern Bank at 8% interest. The principal and interest are payable on 15 August.

Point 2. Drip Dry Cleaning Services purchased a 1-year insurance policy on 1 March of the current year for $660. A 3-year policy was purchased on 1 November of the previous year for $2700. Both purchases were recorded by debiting Prepaid Insurance.

Point 3. The business has two part-time employees who each earn $220 a day. They both worked the last 3 days in June for which they have not yet been paid.

Point 4. On 1 June, the Highup Hotel paid the business $2100 in advance for doing their dry cleaning for the next 3 months. This was recorded by a credit to Unearned Dry Cleaning Revenue.

Point 5. The supplies account had a $280 debit balance on 1 July. Supplies of $1560 were purchased during the year and $190 of supplies are on hand as at 30 June.

Required:

Question 1: Prepare the necessary adjusting entries at 30 June.