The data below concerns adjustments to be made at Coffee Bean Importers.
Adjustments
- On November 1, 2019, the firm signed a lease for a warehouse and paid rent of $21,000 in advance for a six-month period.
- On December 31, 2019, an inventory of supplies showed that items costing $1,940 were on hand. The balance of the Supplies account was $11,880.
- A depreciation schedule for the firm’s equipment shows that a total of $10,750 should be charged off as depreciation in 2019.
- On December 31, 2019, the firm owed salaries of $6,100 that will not be paid until January 2020.
- On December 31, 2019, the firm owed the employer’s social security (6.2 percent) and Medicare (1.45 percent) taxes on all accrued salaries.
- On October 1, 2019, the firm received a five-month, 8 percent note for $6,500 from a customer with an overdue balance.
Required:
- Record the adjusting entries in the general journal as of December 31, 2019.
- Record reversing entries in the general journal as of January 1, 2020.
Analyze:
After the adjusting entries have been posted, what is the balance of the Prepaid Rent account on January 1, 2020?