Luong Corporation encounters the following situations:Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, oraccrued revenue) is needed in each situation at December 31, 2020.1. Luong collects $1,300 from a customer in 2020 for services to beperformed in 2021.2. Luong incurs utility expense which is not yet paid in cash or recorded.3. Luong's employees worked 3 days in 2020 but will not be paid until 2021.4. Luong performs services for customers but has not yet received cash orrecorded the transaction.5. Luong paid $2,800 rent on December 1 for the 4 months startingDecember 1.6. Luong received cash for future services and recorded a liability until theservice was performed.7. Luong performed consulting services for a client in December 2020. OnDecember 31, it had not billed the client for services provided of $1,200.8. Luong paid cash for an expense and recorded an asset until the item wasused up.9. Luong purchased $900 of supplies in 2020; at year-end, $400 of suppliesremain unused.10. Luong purchased equipment on January 1, 2020; the equipment will beused for 5 years.11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-yearnote payable.

The adjustment entries are prepared to adjust the revenue and expenses current period.

Answered: Luong Corporation encounters the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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