The unadjusted trial balance of Emmitt Music Studio at December 31, 2025, and the data needed for the adjustments follow.

Adjustment data at December 31 follow: 

a. As of December 31, Emmitt Music Studio had $900 of Prepaid Insurance remaining. 

b. At the end of the month, Emmitt Music Studio had $900 of supplies remaining. 

c. Depreciation on the building is $1,000. 

d. Emmitt Music Studio pays its employees on Friday for the weekly salaries. Its employees earn $1,500 for a five-day workweek. December 31 falls on Wednesday this year. 

e. On November 20, Emmitt Music Studio contracted to perform services for a client receiving $3,000 in advance. Emmitt Music Studio recorded this receipt of cash as Unearned Revenue. As of December 31, Emmitt Music Studio has $2,200 still unearned.

Requirements 

1. Journalize the adjusting entries on December 31. 

2. Using the unadjusted trial balance, open the accounts (use a four-column ledger) with the unadjusted balances. Post the adjusting entries to the ledger accounts. 

3. Prepare the adjusted trial balance. 

4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly? Explain.  

Transcribed Image Text:

Account Title Cash EMMITT MUSIC STUDIO Unadjusted Trial Balance December 31, 2025 Accounts Receivable Prepaid Insurance Supplies Building Accumulated Depreciation-Building Accounts Payable Salaries Payable Unearned Revenue Common Stock Dividends Service Revenue Salaries Expense Insurance Expense Depreciation Expense-Building Advertising Expense Supplies Expense Total Balance Debit $ 12,000 14,400 2,800 1,400 435,000 2,940 2,800 850 Credit $ 310,500 1,930 3,000 141,060 15,700 $ 472,190 $ 472,190