Reggae Acoustics recorded the following transactions during October: a. Received ($1,500) cash from customer for three months

Question:

Reggae Acoustics recorded the following transactions during October:

a. Received $$1,500$ cash from customer for three months of service beginning October 1 and ending December 31. The company recorded a $$1,500$ debit to Cash and a $$1,500$ credit to Unearned Revenue.

b. Employees are paid $$1,000$ on Monday following the five-day workweek. October 31 is on Friday.

c. The company pays $$240$ on October 1 for its six-month auto insurance policy. The company recorded a $$240$ debit to Prepaid Insurance and a $$240$ credit to Cash.

d. The company purchased office furniture for $$6,300$ on January 2. The company recorded an $$6,300$ debit to Office Furniture and an $$6,300$ credit to Accounts Payable. Annual depreciation for the furniture is $$900$.

e. The company began October with $$50$ of supplies on hand. On October 10, the company purchased supplies on account of $$100.$ The company recorded a $$100$ debit to Supplies and a $$100$ credit to Accounts Payable. The company used $$120$ of supplies during October.

f. The company received its electric bill on October 31 for $$125$ but did not pay it until November 10.

g. The company paid November’s rent of $$800$ on October 30. On October 30, the company recorded an $$800$ debit to Rent Expense and a $$800$ credit to Cash.

Indicate if an adjusting entry is needed for each item on October 31 for the month of October. Assuming the adjusting entry is not made, indicate which specific category or categories of accounts on the financial statements are misstated and if they are overstated or understated. Use the following table as a guide. Item a is completed as an example:

image text in transcribed