Journalizing, adjusting, adjusted trial balance
Harrison’s Repair Service shows opening balance for some accounts on 01 January 20X1: Cash: $36,000; Accounts Receivable: 60,500; Prepaid Rent: $2,400; Supplies: $2,500; Equipment: $13,900; Accumulated depreciation - Equipment: $3,150; Accounts Payable: $2,780; Notes Payable: 16,000; Unearned service revenue: 6,120; Share capital: 86,915; Retained Earnings: 15,335; Dividends: 15,000.
The following transactions in January were:
January 1 Paid the monthly rental fee, $790.
1 Made the monthly payment to Apple Company, $1,700 in order to decrease Accounts
Payable.
6 Purchased additional repair supplies on credit from Pineapple Company, $1820.
15 Received cash for repair service performed, $2,950.
20 Paid cash for an advertisement in the local newspaper, $370.
23 Paid Pineapple Company on account, $1,200
30 Collected payment for repair fees earned, $7,460.
30 Recorded a dividend paid to stockholders, $8,100.
Required
A, Prepare journal entries to record the January transactions.
B, Using the following information, record adjusting entries in the general journal and prepare the T- accounts for all accounts
1. One month of rent has expired. The rental policy is valid in one year starting from the first day of November 20X0.
2. The inventory of unused repair supplies is $1,520
3. The estimated depreciation on repair equipment is $350.
4. Accrued one-month interest expense on Note Payable that will be paid on February 1 (Borrowing Note was in 6-month; annual interest rate is 6%).
5. Accrued salaries for 2 employees at the end of the month, payment for each person is $500
6. Service Revenue still unearned at the end of the period is $3,675
7. Service revenue earned but not billed is $1,800
C. Prepare an adjusted trial balance from above T-accounts