Prepare Adjusting Entries for the Following Items on December 31

question 156

Essay

Prepare adjusting entries for the following items on December 31, the end of the fiscal year for Eddison Don Repairs. The company initially records cash received in advance of performing the service as a liability, and prepaid expenses as current assets.
a)Amortization on truck, $500
b)Services performed but unbilled, $3,000
c)Salaries owed to employees at year end, $2,500
d)Unearned service revenue earned, $5,500
e)Supplies used during the year, $200
f)Prepaid rent expired during the year, $4,500
g)Prepaid insurance now expired $400

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Definitions:

Checkable Deposit

Deposits in bank accounts that can be withdrawn or transferred through checks, debit cards, or electronic means readily without restrictions.

Personal Balance Sheet

A financial statement that summarizes an individual's financial position at a certain point in time, showing assets, liabilities, and net worth.

Checking Deposit

A bank account that allows for the deposit and withdrawal of money for daily transactions, typically offering easy access through checks, ATMs, and electronic transfers.

Security

Measures or mechanisms that ensure the protection of data, resources, and systems from threats and unauthorized access.