GENERAL JOURNAL ENTRIES (32 points) - ASSUME ADJUSTING ENTRIES ARE MADE AT THE END OF THE YEAR
A) Vicky-Vesta Corporation purchases equipment worth $120,000 (expected life of 5 years; $20,000 salvage
value) on October 1. The company uses straight-line depreciation and the equipment is placed into service
the same day as it is purchased. Provide the adjusting entry for December 31. (5 points)
Dec 31
A
B) $1,200 of supplies are on hand. Supplies costing $5,400 are purchased on October 16. On December 31, a
count reveals that $2,650 of supplies remain. Provide ONLY the end of year adjusting entry. (5 points)
Dec 31
Supplies expense
Supplies
B
3950
3956
C) November 4: Vicky-Vesta receives a prepayment of $5,000 in cash for services yet to be performed. By
December 31, 90% of the work has been completed. Provide ALL necessary journal entries. (5 points)
Dec 31
C
D) On November 16, Vicky-Vesta Corporation takes out a 1-year, $90,000 note payable with an interest rate of
6%. Provide entries for December 31 as well as the repayment of the loan the next year. (6 points)
Dec 31
D
E) December 20: Vicky-Vesta Corporation hires its first employee, Salvo, who will earn $7,000/month and will
be paid on the 19th of each month. The company considers his salary to be split 40% in the first month and
60% in the next. Provide the journal entries for December 31 and his first payday on January 19. (6 points)
Dec 31
E
F) Calculations show that by December 31, the company has done consulting work with a value of $8,000 for
which it has yet to be paid. The company receives 75% of the payment on January 17 of the next year.
Provide necessary entries for both December 31 and January 17. (5 points)
Dec 31
F
