Question

Journalize the adjusting entries needed as of January 31. (Record debits first, then credits Select the explanation on the last line of the journal entry table.) a. Business receives $2,500 on January 1 for 10-month service contract for the period January 1 through October 31. (When the cash was recelived on January 1, assume that a liability account was credited. Assume services are performed evenly each month throughout the term of the contract.) Date Accounts and Explanation Debit Credit Jan. 31

Answer 1

Adjusting entries:
Date	Accounts title and explanation				Debit $	Credit $
31-Jan	Unearned Service revenue Account Dr.				250
	Service revenue Account					250
31-Jan	Salaries expense Account Dr.				2100
	Salaries expense Payable Account					$2,100
31-Jan	Accounts receivable Account Dr.				1400
	Service revenue Account					1400
31-Jan	Interest expense Account Dr.				60
	Interest expense Payable					60