Reference no: EM132895174

Question - On December 31, 20X0, adjusting information for Diana Lhou D. Macugay Limited is as follows:

One of the company's customers declared bankruptcy on December 31 20X0. It is now certain that the $30,000 that this customer owes will never be collected. This important fact has never been recorded. In addition, The Company estimates Bad Debt Expense to be 4.0% of Accounts Receivable on the year-end Balance. The Accounts Receivable Balance as at 31/12/X0 before the write-off is $1,030,000, and the allowance for Doubtful Accounts is $10,000 Credit.

The Depreciation Expense on the Equipment is $12,000.

Employees' salaries earned but unpaid and unrecorded and unpaid $16,000.

Unearned Fees Revenue balance includes $250,500 that has been earned.

Interest of $12,500 has accrued on notes payable.

Required -

1. What is the required/adjusting entry for each item.

2. What is the reversing entry for each item where appropriate.