1. Create T-accounts to post all journal entries to appropriate ledgers and calculate account balances as of Sept. 30.

2. Prepare an unadjusted trial balance from T-account balances.

3. Make the following Adjusting Entries

On September 30, the following adjustments must be made:

a. Depreciation of baking equipment transferred to company on July 1st. Depreciation is

computed using the straight-line method. The equipment has a 5-year useful life, and an original

cost of $10,000.

b. Accrue interest for note payable. The annual interest on $10,000 loan from parents is 3%.

Interest is payable quarterly.

c. Record insurance used for the year. Assume a full month for August.

d. Actual baking supplies on-hand as of September 30th is $500.

e. Misc. supplies on-hand as of September 30th is $100.

Step 4.Transfer your adjusting journal entries to the Adjustments columns of the Worksheet.

Step 5. Apply adjusting entries to the trial balance to create the adjusted trial balance. Adjusting entries from Step 3 will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance

Journal entries Date Account titles Debit Credit Jul-01 Cash $10,000 Common Stock $10,000 $2,000 $2,000 Jul-01 Rent expense Prepaid rent Cash $4,000 Jul-01 Equipment $8,000 Common stock $8,000 Jul-02 Cash $10,000 Notes payable $10,000 Jul-04 Baking Supplies Expense Accounts payable $5,000 $5,000 Jul-10 Business Licence Expense $325 Cash $325 Jul-14 Misc. Expense $750 Cash $750 $185 Jul-30 Utilities expense Accounts payable $185 $480 Jul-31 Wages expense Wages payable $480 $5,000 $1,500 Jul-31 Cash Accounts receivable Bakery Sales $6,500 Jul-31 Depreciation expense $133 Accumulated Depreciation $133