(L.OBJ. 4) Preparing adjusting entries [25—35 min] Fast Pages Pack’n Mail completed the...

(L.OBJ. 4) Preparing adjusting entries [25—35 min]

Fast Pages Pack’n Mail completed the following transactions during 2010:

Requirements

1. Journalize these entries by debiting an asset account for Prepaid rent and by crediting a liability account for Unearned service revenue. Explanations are unnecessary.

2. Journalize the related adjustments at December 31, 2010.

3. Post the entries to the T-accounts, and show their balances at December 31, 2010. Posting references are unnecessary.

4. Repeat requirements 1—3. This time, debit Rent expense for the rent payment and credit Service revenue for the collection of revenue in advance.

5. Compare the account balances in requirements 3 and 4. They should be equal.