The following adjustments need to be made before the financialstatements can be prepared at the end of the year.
Task 1: Enter the necessary journal entries into the templateprovided and provide the journal entry for each.

December Interest on a bank loan is due on January 2nd of thefollowing year: accrue $1,000.
A contractor (outside services) has finished work on December 31st,but the invoice will not be received until January 7th of thefollowing year: accrue $750. A rent payment was made on December1st for three months from December 1st to February 28th of thefollowing year (6,000 in total). Record the transactionproperly.

The companyâs part-time employees worked a total of 50 hours inDecember, but will get paid only by January 5th. The hourly rate is$15.
The company must record the payment of its annual insurance premiumfor next year. The annual premium is $1,200, an adjustment isnecessary to prepaid insurance.

Task 2: Provide the adjusted trial balance (combine exercises2.1 and 2.2 to show the adjusted trial balance).

1

Interest Expense

Interest Payable

To record December interest expense to bepaid in January

2

Expense for Outside Services

Accounts Payable

To record liability towardscontractor

To record the appropiate rental expensefor the month

4

Wage Expense

Wages Payable

To record liability towards employees

5

Prepaid Insurance

Cash

To record insurance payment for thefollowing year

Adjusted Trial Balance

Machinery and Equipment

Sale of Goods Produced

-

Cost of Goods Sold

-

Expense for Outside Services

Part A

The following account balances pertain to the Jasper Manufacturing Co. at December 31, 20X3 (before adjusting entries).

	Debit	Credit
Cash ................................................................................	$300,000
Prepaid Insurance .............................................................	50,000
Land ................................................................................	400,000
Accounts Payable .............................................................		30,000
Common Stock .................................................................		250,000
Retained Earnings .............................................................		150,000
Service Revenue ...............................................................		650,000
Wages Expense .................................................................	150,000
Rent Expense ...................................................................	180,000
Total ................................................................................	$1,080,000	$1,080,000

Additional information:

(a)	Prepaid insurance in the trial balance represents an advance payment for 5 months of insurance made on November 1, 20X3.
(b)	In July, the accountant debited accounts payable for a $10,000 fine for a pollution violation; âEnvironmental Expenseâ should have been debited.
(c)	Rent expense in the trial balance represents an advance payment for 6 months rent paid on October 1, 20X3. The Company begins occupying the property on that date.
(d)	Unpaid and unrecorded wages earned by employees at December 31, 20X3, were $60,000.
(e)	Accrue income taxes for 20X3 at 30% on pretax income.

Required:

(1) Prepare adjusting entries to Jasper Co.'s accounts at December 31, 20X3. Each entry should be made in general journal format. Identify each entry by using the letter of the paragraph containing the additional information for the entry.

(2) Prepare the current year income statement

(3) Prepare the current year balance sheet.

(4) Prepare the closing entries.

ivoryprairie-dog877

Adjustment	Account and details	REF	Debit	Credit
1	Interest Expense
	Interest Payable
	To record December interest expense to bepaid in January
2	Expense for Outside Services
	Accounts Payable
	To record liability towardscontractor
3	Rental Expenses
	Prepaid Rent
	Cash
	To record the appropiate rental expensefor the month
4	Wage Expense
	Wages Payable
	To record liability towards employees
5	Prepaid Insurance
	Cash
	To record insurance payment for thefollowing year

	Total		$0	$0

The following adjustments need to be made before the financialstatements can be prepared at the end of the year.
Task 1: Enter the necessary journal entries into the templateprovided and provide the journal entry for each.

December Interest on a bank loan is due on January 2nd of thefollowing year: accrue $1,000.
A contractor (outside services) has finished work on December 31st,but the invoice will not be received until January 7th of thefollowing year: accrue $750. A rent payment was made on December1st for three months from December 1st to February 28th of thefollowing year (6,000 in total). Record the transactionproperly.

The companyâs part-time employees worked a total of 50 hours inDecember, but will get paid only by January 5th. The hourly rate is$15.
The company must record the payment of its annual insurance premiumfor next year. The annual premium is $1,200, an adjustment isnecessary to prepaid insurance.

Task 2: Provide the adjusted trial balance (combine exercises2.1 and 2.2 to show the adjusted trial balance).
Submission Requirements:
Click here to download the template for calculation.

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