(solution) The following information pertains to Wisdom Company for the year

(solution) The following information pertains to Wisdom Company for the year

The following information pertains to Wisdom Company for the year ending on December 31,1995 1.On April 1,the company purchased $ 10000 of 10% ,20 -year bonds of Seles Company.The bonds ,which were acquired at par value,pay interest semiannually on March 31 and September 30. 2.On November 1,the company borrowed $6000 from City Bank and signed a 90 -day ,12% note. 3.On July 31,the company paid $600 for advertisements to be run evenly over one year.A real account was debited. 4.On August 1,the company purchased a three – year fire insurance policy for $3 600 and debited a balance sheet account. 5.On October 1,the company received $900 from a tenant and credited a balance sheet account.The amount represents rent paid in advance for one year. 6.The company’s estimate of bad debts for the year is $2 450. 7.Depreciation was computed as $3 500 for the year. 8.As of December 31,employees have earned wages of $ 500 that the company has not paid or recorded. Instructions:prepare adjusting entries in general journal at December 31,1995