Luong Corporation encounters the following situations: Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued exp accrued revenue) is needed in each situation at December 31, 2020. 1. Luong collects $1,300 from a customer in 2020 for services to be performed 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 or recorded the transaction. 5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1. 6. Luong received cash for future services and recorded a liability until the service was performed. 7. Luong performed consulting services for a client in December 2020. On December 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 was used up. 9. Luong purchased $900 of supplies in 2020; at year-end, $400of supplies remain unused. 10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years. 11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable.
Luong Corporation encounters the following situations: Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued exp accrued revenue) is needed in each situation at December 31, 2020. 1. Luong collects $1,300 from a customer in 2020 for services to be performed 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 or recorded the transaction. 5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1. 6. Luong received cash for future services and recorded a liability until the service was performed. 7. Luong performed consulting services for a client in December 2020. On December 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 was used up. 9. Luong purchased $900 of supplies in 2020; at year-end, $400of supplies remain unused. 10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years. 11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Luong Corporation encounters the following situations:
Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or
accrued revenue) is needed in each situation at December 31, 2020.
1. Luong collects $1,300 from a customer in 2020 for services to be
performed 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 or
recorded the transaction.
5. Luong paid $2,800 rent on December 1 for the 4 months starting
December 1.
6. Luong received cash for future services and recorded a liability until the
service was performed.
7. Luong performed consulting services for a client in December 2020. On
December 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 was
used up.
9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies
remain unused.
10. Luong purchased equipment on January 1, 2020; the equipment will be
used for 5 years.
11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year
note payable.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15e69360-0499-4ff2-beec-adcc322abe21%2Faf5a2e59-1115-4e08-820f-f1dbfa86ba17%2F5blbnj7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Luong Corporation encounters the following situations:
Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or
accrued revenue) is needed in each situation at December 31, 2020.
1. Luong collects $1,300 from a customer in 2020 for services to be
performed 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 or
recorded the transaction.
5. Luong paid $2,800 rent on December 1 for the 4 months starting
December 1.
6. Luong received cash for future services and recorded a liability until the
service was performed.
7. Luong performed consulting services for a client in December 2020. On
December 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 was
used up.
9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies
remain unused.
10. Luong purchased equipment on January 1, 2020; the equipment will be
used for 5 years.
11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year
note payable.
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