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All of the current year's entries for Zimmerman Company have been made, except the following adjusting...

All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December 31 On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520. On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date. Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount. The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded. At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year. On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year. 2. Using the following headings, indicate the effect of each adjusting entry and the amount of the effect. Use + for increase, − for decrease. (Reminder: Assets = Liabilities + Stockholders’ Equity; Revenues – Expenses = Net Income; and Net Income accounts are closed to Retained Earnings, a part of Stockholders’ Equity.)

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On September 1 of the current year, Zimmerman collected six months rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520 Unearned rent revenue (-Liability) $5,680 $5,680 Rent revenue (+Revenue, +Shareholders Equity) ($8,520*4/6) On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date Interest expense (+Expense, -Shareholders Equity) 2 396 Interest payable (+Liability) ($13,200*12% *3/12) 396 Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000 Depreciation expense (+Expense, -Shareholders Equity) 3 3,000 Accumulated depreciation (+Liability; -Asset) $3,000 Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received Unearned service revenue (-Liability) 4 600 Service revenue (+Revenue, +Shareholders Equity) ($3,600 * 2/12) 600 On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount. Insurance Expense (+Expense, -Shareholders Equity) $ 1,660 $ 1,660 Prepaid Insurance (-Asset) ($9,960* 2/12) The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded Accounts Receivable (+Asset) 6 $4,200 Service revenue (+Revenue, +Shareholders Equity) $4,200 At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year Wage Expense (+Expense, -Shareholders Equity) $ 13,700 Wages Payable (+Liability) $ 13,700 On December 31 of the current year, the company estimated it owed $490 for this years property taxes on land. The tax will be paid when the bill is received in January of next year Property Tax (+Expense, -Shareholders Equity) $490 Property Tax Payable (+Liability) $490

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