A review of the ledger of Greenberg Corporation at its year end, October 31, 2018, produces the

Question:

A review of the ledger of Greenberg at its year end, October 31, 2018, produces the following unadjusted data for the preparation of annual adjusting entries:
1. Prepaid Advertising, October 31, 2018, unadjusted balance, $8,400: On February 1, 2018, the company signed and prepaid $8,400 for a 12-month advertising contract for advertisements to run in a trade magazine that publishes monthly, with the first advertisement starting March 1.
2. Unearned Revenue, October 31, 2018, unadjusted balance, $135,000: The company began subleasing office space in its new building on September 1, 2018. At October 31, the company had five one-year contracts for rental space, signed September 1 at a monthly rent of $4,500. All five tenants paid six months' rent in advance on September 1 for the 12-month rental.
3. Bank Loan Payable, October 31 unadjusted balance, $90,000: This represents a one-year, 8% bank loan signed on April 1, 2018. Interest is payable at maturity.
4. Vehicles, October 31, 2018, unadjusted balance, $39,000: The company owns a vehicle, purchased for $39,000 on April 1, 2017. The vehicle has a five-year useful life and uses straight-line depreciation.
Instructions
(a) 1. How much advertising expires per month?
2. Prepare a calculation to show why the unadjusted balance in the Prepaid Advertising account is $8,400 at October 31.
3. How much should the adjusted balance in the Prepaid Advertising account be at October 31?
(b) 1. Prepare a calculation to show why the unadjusted balance in the Unearned Revenue account is $135,000 at October 31.
2. How much should the adjusted balance in the Unearned Revenue account be at October 31?
(c) 1. How much is interest on the bank loan each month?
2. How much interest is owed, if any, on October 31, 2018?
3. How much interest will be paid on April 1, 2019, when the bank loan matures?
(d) 1. How much is annual depreciation expense?
2. Calculate the unadjusted balance in the Accumulated Depreciation account as at October 31, 2018.
3. How much should the adjusted balance in the Accumulated Depreciation account be at October 31, 2018?
(e) Prepare the adjusting journal entries required for each of the above four items at October 31, 2018.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...