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The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assume all quarterly adjusting entries were properly recorded. On December 1, 2020, the company paid its annual fire insurance premium of $9,200 for the year beginning December 1 and debited prepaid insurance. On August 31, 2020, the company borrowed $152,500 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2021. Mazzanti owns a warehouse that it rents to another company. On January 1, 2021, Mazzanti collected $30,400 representing rent for the 2021 calendar year and credited deferred rent revenue. Depreciation on the office building is $22,200 for the fiscal year. Employee salaries for the month of June 2021 $22,000 will be paid on July 20, 2021. Prepare the necessary year-end adjusting entries at the end of June 30, 2021, for the above situations. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Answer:

1.Dr Insurance expense 2,300

Cr Prepaid insurance 2,300

2.Dr Interest expense 3,050

Cr Interest payable 3,050

3.Dr Deferred rent revenue 7,600

Cr Rent revenue 7,600

4.Dr Depreciation expense 5,550

Accumulated

depreciation—building 5,550

5.Dr Salaries and wages expenses 22,000

Cr Salaries and wages payable 22,000

Explanation:

The Mazzanti Wholesale Food Company's Journal entries

1.

Dr Insurance expense 2,300

(9200×3/12 months)

Cr Prepaid insurance 2,300

2.

Dr Interest expense 3,050

(152,500×8%×3/12months )

Cr Interest payable 3,050

3.

Dr Deferred rent revenue 7,600

(30,400×3/12months)

Cr Rent revenue 7,600

4.

Dr Depreciation expense 5,550

(22,200×3/12 months)

Accumulated

depreciation—building 5,550

5.

Dr Salaries and wages expenses 22,000

Cr Salaries and wages payable 22,000

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