Mendoza Co. was organized on July 1. 2006. Quarterly financial statements are prepared.

The unadjusted and adjusted trial balances as of September 30 are shown below.

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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Cash Accounts Receivable Prepaid Rent Supplies Equipment MENDOZA CO. Trial Balance September 30, 2006 Unadjusted Accumulated Depreciation-Equipment Notes Payable Accounts Payable Salaries Payable Interest Payable Unearned Rent Dr. $ 6,700 400 1.500 1.200 15,000 Cr. Dr. Adjusted $6,700 600 Cr. 900 1,000 15.000 $ 850 $ 5,000 5,000 1,510 1,510 400 50 900 500 14,000 14,000 Common Stock Retained Earnings -0- --0- Dividends 600 600 Commission Revenue 14,000. 14,200 Rent Revenue 400 800 Salaries Expense 9,000 9,400 Rent Expense 900 1,500 Depreciation Expense 850 Supplies Expense 200 Utilities Expense 510 510 Interest Expense 50 $35,810 $35.810 $37,310 $37,310