Question

Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below.
Account Title Debits Credits
Cash35,500
Accounts receivable43,000
Supplies3,000 Inventory63,000
Notes receivable23,000
Interest receivable0
Prepaid rent2,500
Prepaid insurance9,000
Office equipment92,000
Accumulated depreciation 34,500
Accounts payable 34,000
Salaries payable 0
Notes payable 53,000
Interest payable 0
Deferred sales revenue 3,500
Common stock 81,000
Retained earnings 36,000
Dividends7,000
Sales revenue 161,000
Interest revenue 0
Cost of goods sold85,000
Salaries expense20,400
Rent expense12,500
Depreciation expense0
Interest expense0
Supplies expense2,600
Insurance expense0
Advertising expense4,500
Totals 358,600 358,600 Information necessary to prepare the year-end adjusting entries appears below.1. Depreciation on the office equipment for the year is $10,300.2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $900.3. On October 1, 2021, Pastina borrowed $50,600 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.4. On March 1, 2021, the company lent a supplier $20,600 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.5. On April 1, 2021, the company paid an insurance company $6,600 for a one-year fire insurance policy. The entire $6,600 was debited to prepaid insurance.6. $560 of supplies remained on hand at December 31, 2021.7. A customer paid Pastina $2,300 in December for 900 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.8. On December 1, 2021, $1,200 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $600 per month. The entire amount was debited to prepaid rent.Prepare closing entries.

Answer 1

The  necessary December 31, 2021, adjusting journal entries are: Debit Depreciation expenses $10,300, Credit Accumulated depreciation $10,300.

Journal entries

Pastina Company Adjusting entries

Debit Depreciation expenses $10,300

Credit Accumulated depreciation $10,300

Debit Wages expense $900

Credit Wages payable $900

Debit Interest expense $1,518

($50,600 × 12% × 3/12)

Credit Interest payable  $1,518

Debit Interest receivable $1,373

($20,600 × 8% × 10/12)

Credit Interest revenue

Debit Prepaid insurance $4,125

($6,600 × 15/24)

Credit Insurance expense $4,125

Debit Supplies expense $340

($900 − $560)

Credit Supplies $340

Debit Sales revenue $2,300

Credit Unearned revenue $2,300

Debit Rent expense $600

Credit Prepaid rent $600

Therefore the necessary December 31, 2021, adjusting journal entries are: Debit Depreciation expenses $10,300, Credit Accumulated depreciation $10,300.

Learn more about journal entries here:brainly.com/question/14279491

#SPJ1