Journalize the adjusting entry needed on December 31, the company’s year end, for each of the following independent cases affecting Eagle Communications:
a. Each Friday the company pays its employees for the current week’s work. The amount of the payroll is $15,000 for a five-day workweek. The current accounting period ends on Wednesday.
b. Eagle has received notes receivable from some clients for professional services. During the current year, Eagle has earned interest revenue of $800, which will be received next year.
c. The beginning balance of Supplies was $4,800. During the year the company purchased supplies costing $7,600, and at December 31 the inventory of supplies remaining on hand is $3,200.
d. The company is developing a wireless communication system for a large company, and the client paid Eagle $120,000 at the start of the project. Eagle recorded this amount as Unearned Consulting Revenue. The development will take several months to complete. Eagle executives estimate that the company has earned three-fourths of the total fee during the current year.
e. Amortization for the current year includes the following: Office Furniture, $8,600, and Design Equipment, $16,000. Make a compound entry. (Hint: This means showing everything in one journal entry and not two.)
f. Details of Prepaid Insurance are shown in the account:
Eagle Communications prepays a full year’s insurance on January 2. Record insurance expense for the year ended December 31 as one annual adjustment for what was used for the year.
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