Prepare Adjusting Entries for the Following Items on December 31

question 134

Essay

Prepare adjusting entries for the following items on December 31, the end of the fiscal year for Carson Carpets. The company initially records cash received in advance of performing the service as a liability, and prepaid expenses as current assets.
a)Amortization on equipment, $2,500
b)Services performed but unbilled, $3,500
c)Salaries owed to employees at year end, $2,500
d)Unearned service revenue earned, $5,500
e)Supplies used during the year, $3,200
f)Prepaid rent expired during the year, $7,500

---

Definitions:

General Journal

An accounting book where all transactions are initially recorded, based on the double-entry bookkeeping system, before being transferred to specific accounts.

Accounts Receivable

Company receivables from goods or services provided to customers that remain unpaid.

Accounts Payable

Debts or financial obligations to vendors or lenders for products and services that have been acquired but remain unpaid.

Office Equipment

Office Equipment refers to the assets purchased for use in a business office, which may include computers, printers, furniture, and more, aiding in operational efficiencies.