Question

The following data relate to the accounts of Blossom Company. a. Unpaid salaries and wages at year end amount to $450. b. Blossom Company owns bonds of another corporation that pay annual interest of $920. These bonds were purchased on April 1, 2020, and the next interest payment will be received on April 1, 2021. c. A two-year insurance policy was purchased on June 1, 2020. The $1,440 insurance premium was paid on that date and was debited to Prepaid Insurance. d. Service Revenue was credited for $720 on June 1, 2020. The amount represents a one-year advance payment for services to be performed by Blossom Company through May 31, 2021. e. The Supplies account shows a balance of $1,800 on December 31, 2020. A physical count of the supplies on hand at this date reveals a total of $850 available. Prepare the necessary adjusting journal entries indicated by each item for the year ended

Answer 1

Answer:

Blossom Company

Journal Entries

a. Debit Salaries and Wages Expense $450

Credit Salaries and Wages Payable $450

To record accrued salaries and wages.

b. Debit Interest Receivable $690

Credit Interest Revenue $690

To record interest on bonds for the year.

c. Debit Insurance Expense $420

Credit Prepaid Insurance $420

To record insurance expense for the year.

d. Debit Service Revenue $300

Credit Unearned Revenue $300

To record unearned revenue.

e. Debit Supplies Expense $950

Credit Supplies $950

To record the supplies expense for the year.

Explanation:

1. Data and Analysis:

a. Salaries and Wages Expense $450 Salaries and Wages Payable $450

b. Interest Receivable $690 Interest Revenue $690

c. Insurance Expense $420 Prepaid Insurance $420

d. Service Revenue $300 Unearned Revenue $300

e. Supplies Expense $950 Supplies $950