Effect of adjusting entries on the accounting equation

Required
Each of the following independent events requires a year-end adjusting entry. Show how each event and its related adjusting entry affects the accounting equation. Assume a December 31 closing date. The first event is recorded as an example.


a. Paid $4,800 cash in advance on October 1 for a one-year insurance policy.
b. Received an $3,600 cash advance for a contract to provide services in the future. The contract required a one-year commitment, starting April 1.
c. Purchased $1,200 of supplies on account. At year€™s end, $175 of supplies remained on hand.
d. Paid $9,600 cash in advance on August 1 for a one-year lease on officespace.

Transcribed Image Text:

Total Assets Stockholders' Equity Retained Adjustment Cash + Assets = Liabilities + Stock + Earnings Event/ Other Common -4,800 NA +4,800 -1,200 NA NA NA NA NA Adj 一1,200