Recording adjustments for accrued and prepaid expense items and unearned income.On July 1,...

Recording adjustments for accrued and prepaid expense items and unearned income.

On July 1, 2016, Sean McConnell established his own accounting practice. Selected transactions for the first few days of July follow.

INSTRUCTIONS

1. Record the transactions on page 1 of the general journal. Omit descriptions. Assume that the firm initially records prepaid expenses as assets and unearned income as a liability.

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2. Record the adjusting journal entries that must be made on July 31, 2016, on page 2 of the general journal. Omit descriptions.

Analyze: What balance should be reflected in Unearned Accounting Fees at July 31, 2016?