Answer to Question #41496 in Finance for sugunah

Question #41496
Prepare adjusting journal entries for Wan Catering in the GENERAL JOURNAL for the year ended 31st December 2012, for each of these situations. Narratives for each entry are required.

i. Wan Catering received RM5, 000 from a customer on November 15, 2012, for catering service to be performed in December 2013. The RM5, 000 was recorded in Unearned Revenue in November 2012. By the end of December, the service has been performed.

ii. Wan Catering invested RM50, 000 into a 5% government bond some years ago. The 5% interest was due to be paid on 31st December every year. However, Wan Catering had yet to receive the payment from the government by 31st December 2012.

iii. Wan Catering paid a total salary of RM28, 000 every month to all of its staffs. Due to some unforeseen circumstances, the salaries for the final week amounting to RM7, 000 have not been paid.

iv. Wan Catering paid RM12, 000 for insurance for 12 months beginning on 1st September 2012. The amount was recorded as Prepaid Insurance on 1st September.

v. Wan Catering purchased a RM3, 500 kitchen equipment on 1st January 2012. It is expected to have a useful life of three years and it will worth about RM500 at the end of three years. Wan Catering used the straight-line depreciation method. (15 marks)
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