Instructions: For each adjustment below, indicate which category (prepaid expense, depreciation, accrued expense, accrued revenue, or unearned revenue) each fall under. Also, prepare the annual adjusting entries as of December 31. 1. The equipment depreciates at a $2,000 per year. The equipment was purchased on Oct. 1st of the current year. 2. The company has a 9 month, $6,000, 5% note payable outstanding which is dated Nov. 1st of the current year. 3. The balance in the prepaid insurance account is $4,000. This represents a one-year policy purchased on May 1st of the current year. . Unbilled revenue at Dec. 31st total $1,200. The company rents out office space and requires all tenants to pay the first six months in advance at the time of rental. On Oct. 1st of the current year, the company received $9,000 in advance. tem 1 2 Category of Adjustment Accounts Debit Credit
Instructions: For each adjustment below, indicate which category (prepaid expense, depreciation, accrued expense, accrued revenue, or unearned revenue) each fall under. Also, prepare the annual adjusting entries as of December 31. 1. The equipment depreciates at a $2,000 per year. The equipment was purchased on Oct. 1st of the current year. 2. The company has a 9 month, $6,000, 5% note payable outstanding which is dated Nov. 1st of the current year. 3. The balance in the prepaid insurance account is $4,000. This represents a one-year policy purchased on May 1st of the current year. . Unbilled revenue at Dec. 31st total $1,200. The company rents out office space and requires all tenants to pay the first six months in advance at the time of rental. On Oct. 1st of the current year, the company received $9,000 in advance. tem 1 2 Category of Adjustment Accounts Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Instructions: For each adjustment below, indicate which category (prepaid expense, depreciation,
accrued expense, accrued revenue, or unearned revenue) each fall under. Also, prepare the annual
adjusting entries as of December 31.
1.
The equipment depreciates at a $2,000 per year. The equipment was purchased on Oct. 1st of the current
year.
2. The company has a 9 month, $6,000, 5% note payable outstanding which is dated Nov. 1st of the current
year.
4
5
3. The balance in the prepaid insurance account is $4,000. This represents a one-year policy purchased on May
1st of the current year.
4. Unbilled revenue at Dec. 31st total $1,200.
5. The company rents out office space and requires all tenants to pay the first six months in advance at the time
of rental. On Oct. 1st of the current year, the company received $9,000 in advance.
Item
1
3
2
Category of Adjustment
Accounts
Debit
Credit
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