Computer Consulting Company uses the asset-and-liability approach in accounting for prepaid expenses and unearned revenues. Selected account balances at the end of the current and prior year are presented below. Accrued expenses and revenues are adjusted only at year-end.

During 2002, Computer Consulting paid \($10,000\) for rent and \($50,000\) for wages.
\($108,000\) was received for consulting fees, and \($2,400\) was received as interest.
1 . Provide the entries that were made at December 3 1 , 2002, to adjust the accounts to the year-end balances above.

Determine the proper amount of Rent Expense. Salaries and Wages Expense, Consulting Fees Revenue, and Interest Revenue to be reported on the current-year income statement.

Transcribed Image Text:

Prepaid Rent Salaries and Wages Payable Unearned Consulting Fees Interest Receivable Adjusted Balances December 31, 2001 $ 6,200 1,900 16,400 Adjusted Balances December 31, 2002 $3,600 4,500 6,400 650 1,800