Everett Co. was organized on July 1, 2020. Quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown as follows.

Instructions

a. Journalize the adjusting entries that were made.

b. Prepare an income statement and a retained earnings statement for the 3 months ending September 30 and a balance sheet at September 30.

c. If the note bears interest at 12%, how many months has it been outstanding?

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Everett Co. Trial Balance September 30, 2020 Unadjusted Cr. $ 8,700 Adjusted Cr. Dr. Dr. $ 8,700 Cash 10,400 Accounts Receivable 11,500 Supplies 1,500 650 Prepaid Rent Equipment Accumulated Depreciation-Equipment 2,200 1,200 18,000 18,000 $ -0- $ 700 Notes Payable 10,000 10,000 Accounts Payable Salaries and Wages Payable Interest Payable 2,500 2,500 -0- 725 -0- 100 Unearned Rent Revenue 1,900 1,050 Common Stock 22,000 22,000 Dividends 1,600 1,600 16,000 Service Revenue 17,100 1,410 2,260 Rent Revenue Salaries and Wages Expense 8,000 8,725 Rent Expense Depreciation Expense Supplies Expense Utilities Expense Interest Expense 1,900 2,900 700 850 1,510 1,510 100 $53,810 $53,810 $56,435 $56,435