Several transactions for Trolley, Inc. are presented below. The company adjusts its books only at year-end. a. On August 1, the company rented some land from another company for $2,660 for a three-year time period. Trolley charged an expense account on August 1. b. On February 1, Trolley paid $9,600 for a four-year technical service contract. Trolley will receive services evenly throughout the four-year period. The company debited the asset account, Prepaid Service Contract, on February 1. c. On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note. d. The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday. Required: Prepare adjusting entries for December 31.

Several transactions for Trolley, Inc. are presented below. The company adjusts its books only at year-end. a. On August 1, the company rented some land from another company for $2,660 for a three-year time period. Trolley charged an expense account on August 1. b. On February 1, Trolley paid $9,600 for a four-year technical service contract. Trolley will receive services evenly throughout the four-year period. The company debited the asset account, Prepaid Service Contract, on February 1. c. On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note. d. The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday. Required: Prepare adjusting entries for December 31.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 19E: Rix Company sells home appliances and provides installation and service for its customers. On April...

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