Gaffney Company had these adjusting entry situations at

the end
Gaffney Company had these adjusting entry situations at the end of December.1. On July 1,
Gaffney Company paid $1,200 for a one-year insurance policy. The policy was for the period
July 1 through June 30. The transaction was recorded as prepaid insurance and a reduction in
cash.2. On September 10, Gaffney Company purchased $500 of supplies for cash. The
purchase was recorded as supplies. On December 31, it was determined that various supplies
had been consumed in operations and that supplies costing $200 remained on hand.3. Gaffney
Company received $1,000 on December 1 for services to be performed in the following year.
This was recorded on December 1 as an increase in cash and as revenue. As of December 31,
this needs to be recognized as Unearned Revenue, a liability account.4. As of December 31,
interest charges of $200 have been incurred because of borrowed funds. Payment will not be
made until February. A liability for the interest needs to be recognized, as does the interest
expense.5. As of December 31, a $500 liability for salaries needs to be recognized.6. As of
December 31, Gaffney Company had provided services in the amount of $400 for Jones
Company. An asset, Accounts Receivable, needs to be recognized along with the
revenue.Required Record the adjusting entries at December 31, using T-accounts.View
Solution:
Gaffney Company had these adjusting entry situations at the end
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