The following situations for XY Corporation were encountered during the adjusting and closing process for 2014. Their 2014 fiscal year ends on December 31.
For each situation you are to give ONLY the adjusting entry or entries that would be made on December 31, 2014. Make each adjusting entry in general journal format in the space provided. Explanations are not necessary.
1. The company owns a machine that cost $87,000-purchased July 1, 2011. The estimated life of the machine is 15 years, no salvage, and straight line depreciation is being used.
2. The beginning balance of Office Supplies Inventory was $200. During 2014, $4, 100 of office supplies were purchased and debited to Office Supplies Expense. An inventory of office supplies on December 31, showed $250 of supplies on the shelves.
3. On July 1, 2014, the company paid a three-year insurance premium amounting to $900 and debited Prepaid Insurance in recording the transaction.
4. On July 1, 2014, the company borrowed $60,000 from their bank for one year at 10% interest.
5. On October 1, 2014, the company paid rent on some leased office space. The payment of $3,000 cash was for the following 12 months. At the time of payment, Rent expense was debited for the $3,000.