Question

Adjusting Entries The following selected accounts appear in the Birch Company's unadjusted trw balance of December the end of the clear all accounts have normal balances to manance service for m e , beginning September 1. The payment was debited to Prepaid Mainten Required Prepare the necessary adjusting entries in the general malas of December 31, foi 1.On September 1, the company entered into a prepaid equipment maintenance contract Bech Company 2. Supplies on hand at December 31 are $2.900 3. Uneamed commission fees at December 31 are 14.000 4 Commission fees earned but not yet biled at December 31 53.500 Note: Debit Fees Receivable) 5. Barch Company's lease calls for rent of $900 per month payable on the first of each monthusa Note: Be sure to use the adjusted amount of commissions earned in computing the additional rent to com

for number 1: Birch company paid 2700 to cover maintenance for 6 months beginning September 1. Payment was debited to prepaid maitenance.

Answer 1

Solution:

Journal Entries - Birch Company
Date	Particulars	Debit	Credit
31-Dec	Maintenance expense Dr ($2,700*4/6)	$1,800.00
	To Prepaid maintenance		$1,800.00
	(To record maintenance expense)
31-Dec	Supplies expense Dr ($9,400 - $2,900)	$6,500.00
	To Supplies		$6,500.00
	(To record supplies expense)
31-Dec	Unearned commission fees Dr ($9,000 - $4,000)	$5,000.00
	To Fees earned		$5,000.00
	(To record commission fees revenue)
31-Dec	Fees receivables Dr	$3,500.00
	To Fees earned		$3,500.00
	(To record fees earned)
31-Dec	Rent expense Dr [($86,000 + $5,000 + $3,500)*2%]	$1,890.00
	To Rent payable		$1,890.00
	(To record rent expense)

Answer 2

067983465

45

63

457

3567

5647

7

4567