The following information of North enterprises (A small recording studio) is available as source for preparing adjusting entries as of December 31,2018 1) On November 1.2018, the studio paid 6,000 rent in advance for November, December and January. The entire amount was debited to Prepaid studio rent. 2) Recording equipment was bought two years before at cost of 90,000,the use full life of recording equipment is estimated to be five years, Straight line method of depreciation is used 3) The studio accounts estimates that income tax expense for entire ended December 31.2018 is 20,000 4) Salaries earned by recording technicians that remain unpaid at December 31 amount 500 ou are required to prepare necessary adjusting entries (including an explanations) if no adjusting is equired, explain. Why.
The following information of North enterprises (A small recording studio) is available as source for preparing adjusting entries as of December 31,2018 1) On November 1.2018, the studio paid 6,000 rent in advance for November, December and January. The entire amount was debited to Prepaid studio rent. 2) Recording equipment was bought two years before at cost of 90,000,the use full life of recording equipment is estimated to be five years, Straight line method of depreciation is used 3) The studio accounts estimates that income tax expense for entire ended December 31.2018 is 20,000 4) Salaries earned by recording technicians that remain unpaid at December 31 amount 500 ou are required to prepare necessary adjusting entries (including an explanations) if no adjusting is equired, explain. Why.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ignore other parts of questions just do the explain why part ? Just narrates the question where it's required.
Transcribed Image Text:The following information of North enterprises (A small recording studio) is available as source for
preparing adjusting entries as of December 31,2018
1) On November 1.2018, the studio paid 6,000 rent in advance for November, December
and January. The entire amount was debited to Prepaid studio rent.
2) Recording equipment was bought two years before at cost of 90,000,the use full life of
recording equipment is estimated to be five years, Straight line method of depreciation is used
3) The studio accounts estimates that income tax expense for entire ended December
31.2018 is 20,000
4) Salaries earned by recording technicians that remain unpaid at December 31 amount 500
You are required to prepare necessary adjusting entries (including an explanations) if no adjusting is
required, explain. Why.
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