7. Emeril performed consulting services for a client in December 2008. On December 31, it billed the client $1,200.

8. Emeril paid cash for an expense and recorded an asset until the item was used up.

9. Emeril purchased $900 of supplies in 2008; at year-end, $400 of supplies remain unused.

10. Emeril purchased equipment on January 1,2008; the equipment will be used for 5 years.

11. Emeril borrowed $10,000 on October 1,2008, signing an 8% one-year note payable.

Instructions Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, ac¬

crued revenue) is needed in each situation, at December 31,2008.

Prepare adjusting entriesfrom E3-5 Drew Carey Company has the following balances in selected accounts on December 31, selected data. 2008.

(SO 5, 6) Accounts Receivable $ -0-

Accumulated Depreciation—Equipment -0-

Equipment 7,000 Interest Payable -0-

Notes Payable 10,000 Prepaid Insurance 2,100 Salaries Payable -0-

Supplies 2,450 Unearned Consulting Revenue 40,000 All the accounts have normal balances. The information below has been gathered at December 31,2008.

1. Drew Carey Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2008.

2. A count of supplies on December 31,2008, indicates that supplies of $800 are on hand.

3. Depreciation on the equipment for 2008 is $1,000.

4. Drew Carey Company paid $2,100 for 12 months of insurance coverage on June 1,2008.

5. On December 1,2008, Drew Carey collected $40,000 for consulting services to be performed from December 1,2008, through March 31,2009.

6. Drew Carey performed consulting services for a client in December 2008. The client will be billed $4,200.

7. Drew Carey Company pays its employees total salaries of $9,000 every Monday for the pre¬

ceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2008.