Question

Required information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5, P6 (The following information applies to the questions displayed below.) Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31. Additional Information Items a. An analysis of WTI's insurance policies shows that $2.400 of coverage has expired. b. An Inventory count shows that teaching supplies costing $2.800 are available at year-end. c. Annual depreciation on the equipment is $13.200. d. Annual depreciation on the professional library is $7.200. e. On September 1. WTI agreed to do five courses for a client for $2.500 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client pald $12.500 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $7.500 of the tuition has been earned by WTI. g. WTI's two employees are pald weekly. As of the end of the year two days' salaries have accrued at the rate of $100 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance 14 15 16 of 16 Next >

Answer 1

Journal entry

No	Date	account and explanation	Debit	Credit
1	Dec 31	Insurance expense	2400
		Prepaid insurance		2400
2	Dec 31	Teaching supplies expense	5200
		Teaching supplies (8000-2800)		5200
3	Dec 31	Depreciation expense	13200
		Accumulated depreciation-equipment		13200
4	Dec 31	Depreciation expense	7200
		Accumulated depreciation-professional library		7200
5	Dec 31	Unearned training fees	5000
		Training fees		5000
6	Dec 31	Account receivable	7500
		Tuition fees		7500
7	Dec 31	Salaries expense	400
		Salaries payable		400
8	Dec 31	Rent expense	3000
		Prepaid rent		3000