Based on the information below, record the adjusting journal entries that must be made for John Gavone Consulting on June 30, 2013. The company has a June 30 fiscal year-end. Use 18 as the page number for the general journal.
a.–b. Merchandise Inventory, before adjustment, has a balance of $7,500. The newly counted inventory balance is $8,000.
c. Unearned Seminar Fees has a balance of $6,000, representing prepayment by customers for five seminars to be conducted in June, July, and August 2013. Two seminars had been conducted by June 30, 2013.
d. Prepaid Insurance has a balance of $12,000 for six months insurance paid in advance on May 1, 2013.
e. Store Equipment costing $5,000 was purchased on March 31, 2013. It has a salvage value of $500, and a useful life of five years.
f. Employees have earned $250 that has not been paid at June 30, 2013.
g. The employer owes the following taxes on wages not paid at June 30, 2013: SUTA, $7.50; FUTA, $2,00; Medicare, $3.63; and Social Security, $15.50.
h. Management estimates uncollectible accounts expense at 1% of sales. This year’s sales were $2,000,000.
i. Prepaid Rent has a balance of $6,600 for six months rent paid in advance on March 1, 2013.
j. The supplies account in the general ledger has a balance of $400. A count of supplies on hand at June 30, 2013 indicated $150 of supplies remain.
k. The company borrowed $6,000 from First Bank on June 1, 2013 and issued a four-month note. The note bears interest at 7%.
Analyze: After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?
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