The given relate to Eagle Corporation; suppose a December 31, 2011 year end:
During the year 2011, Eagle Corporation purchased supplies for $2,500. At December 31, 2010, the supplies account reflected a balance of $750. At December 31, 2011, a count of the supplies exhibits $1,500 of supplies on hand. Eagle Corporation leases some of its office space to the other company. On October 1, 2011, Eagle received a $5,000 check from its tenant that was credited to Rent Revenue. The check is to satisfy four months of rent. On February 1, 2011, Eagle borrowed $150,000 from Bank of America. The note is due in one year and carries an interest rate of 6%. Eagle Corporation performed and completed services for clients in December 2011; payment for $15,000 of such services will not be collected till January. On May 31, 2011, Eagle Corporation acquired equipment for $23,000. Eagle estimates that it will employ the equipment for 4-years and that at the end of that period; the equipment will be worth $5,000.
Make the adjusting journal entry needed for each of the above. Prior to making the adjusting entries above, Eagle's accountant find out net income to be $8,000. Find out what Eagle must report as net income as of December 31, 2011