The geological consulting firm of Gilbert, Marsh, & Kester prepares adjusting entries on a monthly basis....
The geological consulting firm of Gilbert, Marsh, & Kester prepares adjusting entries on a monthly basis. Among the items requiring adjustment on December 31, year 2, are the following.
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The company has outstanding a $59,000, 9 percent, 2-year note payable issued on July 1, year 1. Payment of the $59,000 note, plus all accrued interest for the 2-year loan period, is due in full on June 30, year 3.
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The firm is providing consulting services to Texas Oil Company at an agreed-upon rate of $950 per day. At December 31, 10 days of unbilled consulting services have been provided.
a. Prepare the two adjusting entries required on
December 31 to record the accrued interest expense and the accrued
consulting revenue earned.
Homework Answers
| Date | Account Titles and Explanation | Debit | Credit |
| Dec-31 | Interest expense | $ 442.50 | |
| Interest payable | $ 442.50 | ||
| 59000*9%*1/12 | |||
| To record the accrued interest for the month | |||
| Dec-31 | Accrued consulting revenue | $ 9,500.00 | |
| Consulting revenue | $ 9,500.00 | ||
| 950*10 | |||
| To record the accrued service revenue for the month | |||
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The geological consulting firm of Gilbert, Marsh, & Kester
prepares adjusting entries on a monthly basis....
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