The following is the December 31 trial balance of New York Boutique.
Instructions
a. Construct T-accounts and enter the balances shown.
b. Prepare adjusting journal entries for the following and post to the T-accounts. (Omit explanations.) Open additional T-accounts as necessary. The books are closed yearly on December 31.
1. Bad debt expense is estimated to be €1,400.
2. Equipment is depreciated based on a 7-year life (no residual value).
3. Insurance expired during the year, €2,550.
4. Interest accrued on notes payable, €3,360.
5. Salaries and wages earned but not paid, €2,400.
6. Advertising paid in advance, €700.
7. Office supplies on hand, €1,500, charged to Office Expense when purchased.
c. Prepare closing entries and post to the accounts.
