Prepare the adjusting entries on December 31, 2019. Earned $9,880 of revenue from providing services for which the customer had not yet paid. The bill has not been sent yet. Cash for a 12-month equipment rental in the amount of $3,540 was paid on March 1 for the period of March 1, 2019 through February 28, 2020. The $3,540 was debited to prepaid rent when paid. The company borrowed $44,400 on one-year, 5% note on August 1. The interest for 2019 on the note payable has not been recorded or paid. For one service contract, $14,520 cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year end, $1,210 of the service revenue was still unearned. Used $1,970 of utilities in December, which are unrecorded and unpaid. A six-month insurance policy was purchased for $7,620 cash on August 1 for the period of August 1, 2019 through January 31, 2019. The $7,620 was debited to prepaid insurance when paid. The company had $3,200 of supplies on hand at the beginning of the year. During the year it purchased supplies of $15,000 during the year. At the end of the year, a physical count of supplies showed $4,125 of supplies on hand. The company has a machine that it purchased for $125,000 on January 1. Annual depreciation on the machine is estimated to be $14,500. Salaries of $5,320 that were earned in December are unrecorded and unpaid. For another service contract, $9,840 cash was received in advance and credited to Unearned Service Revenue upon receipt. At year end, $3,280 of the services had been provided.

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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Prepare the adjusting entries on December 31, 2019.

Earned $9,880 of revenue from providing services for which the customer had not yet paid. The bill has not been sent yet.
Cash for a 12-month equipment rental in the amount of $3,540 was paid on March 1 for the period of March 1, 2019 through February 28, 2020. The $3,540 was debited to prepaid rent when paid.
The company borrowed $44,400 on one-year, 5% note on August 1. The interest for 2019 on the note payable has not been recorded or paid.
For one service contract, $14,520 cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year end, $1,210 of the service revenue was still unearned.
Used $1,970 of utilities in December, which are unrecorded and unpaid.
A six-month insurance policy was purchased for $7,620 cash on August 1 for the period of August 1, 2019 through January 31, 2019. The $7,620 was debited to prepaid insurance when paid.
The company had $3,200 of supplies on hand at the beginning of the year. During the year it purchased supplies of $15,000 during the year. At the end of the year, a physical count of supplies showed $4,125 of supplies on hand.
The company has a machine that it purchased for $125,000 on January 1. Annual depreciation on the machine is estimated to be $14,500.
Salaries of $5,320 that were earned in December are unrecorded and unpaid.
For another service contract, $9,840 cash was received in advance and credited to Unearned Service Revenue upon receipt. At year end, $3,280 of the services had been provided.

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