On December 31, 2014 Selected Accounts of the Brolin Personnel

question 134

Essay

On December 31, 2014 selected accounts of the Brolin Personnel Agency, after all year end adjusting entries, show the following data: Analysis indicates that adjusting entries were made for
1. $8,000 of commission revenue earned but not billed,
2. $2,500 of accrued but unpaid interest, and
3. $2,400 of utilities expense accrued but not paid.
Instructions
a. Prepare the closing entries at December 31, 2014.
b. Prepare the reversing entries on January 1, 2015.
c. Prepare the entries to record (1) the collection of the accrued commission on January 8, (2) payment of the utility bill on January 10, and (3) payment of all the interest due ($3,100) on January 15.
d. What is the interest expense for the month of January 2015?

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Definitions:

Rival In Consumption

A characteristic of a good whereby one person's consumption reduces its availability for another person.

Externality

An externality is a consequence of an economic activity experienced by unrelated third parties; it can be either positive (beneficial) or negative (harmful).

Exotic Fish

Fish species that are not native to a specific location, often kept in aquariums or introduced to new environments where they can sometimes become invasive.

Common Resources

Natural or man-made resources that are not excludable but are rival in consumption, such as fish in the sea or public parks.