Reference no: EM132520115

Question - Zemax Inc. began operations on January 2. Its year end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow:

1. On January 2, purchased supplies for $3,500 cash. A physical count at December 31 revealed that $800 of supplies were still on hand.

2. Purchased a vehicle for $44,000 on April 1, paying $4,000 cash and signing a $40,000 bank loan for the balance. The vehicle is estimated to have a useful life of five years.

3. Purchased a $3,500, one-year insurance policy for cash on August 1. The policy came into effect on that date.

4. Received a $1,200 advance cash payment from a client on November 9 for services to be provided in the future. As at December 31, half of these services had been completed.

5. On December 1, the company rented additional office space for a six-month period starting on December 1 for $1,050 each month. It paid rent for the months of December and January in advance of this date.

Required -

1. For each of the above situations, provide the entry for the original transaction.

2. For each of the above situations, provide the adjusting entry required at December 31.