Question

Required information [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 $2,807 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,433 are available at year-end. c. Annual depreciation on the equipment is $11,227. d. Annual depreciation on the professional library is $5,614. 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 paid $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, $7,548 of the tuition has been earned by WTI. g. WTl's two employees are paid 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.

Answer 1

Adjusting entries

No	General Journal	Debit	Credit
1	Insurance expense	2807
	Prepaid insurance		2807
2	Teaching supplies expense (10129-2433)	7696
	Teaching supplies		7696
3	Depreciation expense	11227
	Accumulated depreciation-equipment		11227
4	Depreciation expense	5614
	Accumulated depreciation-Professional library		5614
5	Unearned training fees (2500*2)	5000
	Training fees		5000
6	Account receivable	7548
	Tuition fees		7548
7	Salaries expense (100*2*2)	400
	Salaries payable		400
8	Rent expense	2027
	Prepaid rent		2027