Question

The December 31, 2018, unadjusted trial balance for Demon Deacons Corporation is presented below. Debit Credit Cash Accounts Recelvable Prepaid Rent S 9,600 14,600 6,720 3,600 Deferred Revenue Common Stock Retained Earnings Service Revenue Salaries Expense $ 2,600 10,000 5,600 49,320 33,000 $67,520 $67,520 At year-end, the following additional information is available a. The balance of Prepaid Rent, $6,720, represents payment on October 31, 2018, for rent from November 1, 2018, to April 30, 2019. b. The balance of Deferred Revenue, $2,600, represents payment in advance from a customer. By the end of the year, $650 of the services have been provided. c. An additional $600 in salaries is owed to employees at the end of the year but will not be paid until January 4, 2019. d. The balance of Supplies, $3,600, represents the amount of office supplies on hand at the beginning of the year of $1,500 plus an additional $2,100 purchased throughout 2018. By the end of 2018, only $760 of supplies remains.

Answer 1

Adjusting entries

No	Account and explanation	debit	credit
Dec 31	Rent expense (6720*2/6)	2240
	Prepaid rent		2240
	(To record rent adjusted)
Dec 31	Deferred revenue	650
	Service revenue		650
	(To record service revenue)
Dec 31	Salaries expense	600
	Salaries payable		600
	(To record salaries expense)
Dec 31	Supplies expense (3600-760)	2840
	Supplies		2840
	(To record supplies expense)

Adjusted trial balance

	Debit	Credit
Cash	9600
Account receivable	14600
Prepaid rent (6720-2240)	4480
Supplies	760
Deferred revenue (2600-650)		1950
Salaries payable		600
Common Stock		10000
Retained earnings		5600
Service revenue (49320+650)		49970
Salaries expense	33600
Rent expense	2240
Supplies expense	2840
Total	68120	68120