Adjusting Entries
Response to the following:
Consider the following information related to Pendleton Consulting:
1. On October 1, 2009, Pendleton Consulting entered into an agreement to provide consulting services for six months to Soelberg Company. Soelberg agreed to pay Pendleton $750 for each month of service. Payment will be made at the end of the contract (March 31, 2010).
2. On April 30, Pendleton borrowed $40,000 from a local bank at 12%. The loan is to be repaid, with interest, after one year. As of December 31, no interest expense had been recognized.
3. On February 25, Pendleton paid $36,000 for 12 months of rent beginning on March 1. On February 25, Pendleton made a journal entry debiting Prepaid Rent Expense.
4. At the beginning of 2009, Pendleton had $825 in supplies on hand. During 2009, Pendleton purchased $7,290 in supplies. On December 31, 2009, Pendleton had $1,035 in supplies on hand.
For each item listed, prepare the necessary adjusting entries to be made on December 31, 2009.