The following relate to Eagle Corporation; assume a December 31, 2011 year end:

The following relate to Eagle Corporation; assume a December 31, 2011 year end:

1.  During 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 shows $1,500 of supplies on hand.

2.  Eagle Corporation leases some of its office space to another company. On October 1, 2011, Eagle received a $5,000 check from its tenant which was credited to Rent Revenue. The check is to satisfy four months of rent.

3.  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%.

4.  Eagle Corporation performed and completed services for clients in December 2011; payment for $15,000 of these services will not be collected until January.

5.  On May 31, 2011, Eagle Corporation acquired equipment for $23,000. Eagle estimates that it will use the equipment for 4 years and that at the end of that period, the equipment will be worth $5,000. 

Required:

1.  Prepare the adjusting journal entry required (in proper format) for each of the above.

2.  Prior to making the adjusting entries above, Eagle’s accountant determined net income to be $8,000. Determine what Eagle should report as net income as of December 31, 2011 (show your computations for partial credit review).