Question

Unadjusted Trial Balance - December 31, 2012

	Debits	Credits
Cash	$11,500
Accounts Receivable	3,500
Supplies	1,200
Prepaid Rent	24,000
Equipment	14,000
Accumulated Depreciation		$1,400
Accounts Payable		1,900
Unearned Service Revenue		2,800
Common Stock		10,300
Retained Earnings		7,500
Dividends	4,500
Service Revenue		91,350
Salaries Expense	55,000
Advertising Expense	900
Utilities Expense	650
	$115,250	$115,250

Additional Information:

1. The equipment was purchased on January 1, 2011. The useful life is estimated to be 10 years.

2. As of December 31, 2012, the company had accrued salaries of $950.

3. Of the balance in the unearned revenue account, $500 had not been earned by year -end.

4. On December 1, 2012, the company paid $900 for four months of advertising.

5. A count of supplies on December 31, 2012 showed $400 of supplies had been used during the year.

6. On May 1, 2012, the company rented an office building for one year and paid $24,000 in cash.

 

The adjusting entry to record (4) above would include a:

Group of answer choices

debit to advertising expense for $225

debit to prepaid advertising for $225

credit to advertising expense for $225

credit to prepaid advertising for $675

credit to advertising expense for $675

Answer 1

credit to advertising expense for $675