Omega Company adjusts its accounts at the end of each month. The following information has been assembled in order to prepare the required adjusting entries at December 31, Year 1: (1) A one-year bank loan of $684,000 at an annual interest rate of 10% had been obtained on December 1, Year 1. (2) The company pays all employees up-to-date each Friday. Since December 31, Year 1, fell on Tuesday, there was a liability to employees at that date for two day's pay amounting to $6,200. (3) On December 1, Year 1, rent on the office building had been paid for four months. The monthly rent is $5,400. (4) Depreciation of office equipment is based on an estimated useful life of six years. The balance in the Office Equipment account is $15,120; no change has occurred in the account during the year. (5) Fees of $9,200 were earned during the month for clients who had paid in advance. By what amount will the book value of the office equipment decline after the appropriate December adjustment is recorded? a. 2520 b. 210 c. 0 d. 2310
Omega Company adjusts its accounts at the end of each month. The following information has been assembled in order to prepare the required
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(1) A one-year bank loan of $684,000 at an annual interest rate of 10% had been obtained on December 1, Year 1.
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(2) The company pays all employees up-to-date each Friday. Since December 31, Year 1, fell on Tuesday, there was a liability to employees at that date for two day's pay amounting to $6,200.
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(3) On December 1, Year 1, rent on the office building had been paid for four months. The monthly rent is $5,400.
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(4)
Depreciation of office equipment is based on an estimated useful life of six years. The balance in the Office Equipment account is $15,120; no change has occurred in the account during the year. -
(5) Fees of $9,200 were earned during the month for clients who had paid in advance.
By what amount will the book value of the office equipment decline after the appropriate December adjustment is recorded?
a. 2520
b. 210
c. 0
d. 2310
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