Analyzing Adjusting Entries
Guide com Consulting Company initially records prepaid items as assets and unearned items as liabilities. Selected account balances at the end of the current and prior year follow. Accrued expenses and revenues are adjusted only at year end.
Adjusted Balances, |
Adjusted Balances, |
|
Prepaid Rent |
$ 5,100 |
$3,400 |
Salaries and Wages Payable |
2,100 |
4,700 |
Unearned Consulting Fees |
18,200 |
7,800 |
Interest Receivable |
800 |
2,100 |
During 2008, Guide com Consulting paid $14,000 for rent and $40,000 for wages. It received $112,000 for consulting fees and $3,200 as interest.
1. Provide the entries that were made at December 31, 2008, to adjust the accounts to the year end balances shown above.
2. Determine the proper amount of Rent Expense, Salaries and Wages Expense, Consulting Fees Revenue, and Interest Revenue to be reported on the current year income statement.