Terry Thomas and a group of investors incorporate the Green Thumb Lawn Care Corporation on April 1. At April 30, the trial balance shows the following balances for selected accounts.
|
Prepaid Insurance |
$ 3,600 |
|
Equipment |
28,000 |
|
Notes Payable |
20,000 |
|
Unearned Service Revenue |
4,200 |
|
Service Revenue |
1,800 |
Analysis reveals the following additional data pertaining to these accounts.
1. Prepaid insurance is the cost of a 2 year insurance policy, effective April 1.
2. Depreciation on the equipment is $500 per month.
3. The note payable is dated April 1. It is a 6 month, 12% note.
4. Seven customers paid for the company’s 6 month lawn service package of $600 beginning in April. These customers received the first month of services in April.
5. Lawn services performed for other customers but not billed at April 30 totaled $1,500.
Instructions
Prepare the adjusting entries for the month of April. Show computations.