ABC Corp.

Balance Sheet

As of December 31, 2018

Assets

Cash $6000

A/R $4000

Total Assets $10,000

Liability

A/P $3,000

Stockholder's Equity

Common Stock $3000

Retained Earnings $4000

Total Liability and Stockholder's Equity $10000

1.On January 1^st, 2019, ABC Corp bought an equipment for $2,000. The equipment has a useful life of 5 years and has a salvage value of $500.

2.On May 1^st, 2018, ABC Corp received $1,200 cash for services to be performed in the future. The service agreement is for a period of two years and the service will be performed evenly throughout the two-year period starting from May 1^st, 2018.

3.On July 1^st, 2018, ABC Corp paid $600 for a one-year insurance policy. The policy starts on July 1^st, 2018 and ends on June 30^th, 2019

Please indicate whether an account is an asset (A), liability (L), or equity (E) for journal entries, adjusting entries, and closing entries.

Make journal entries for the follow transactions.

Prepare the unadjusted trial balance.

Make the appropriate adjusting entries at year end.

Prepare the adjusted trial balance

Make the appropriate closing entries. Hint: close it directly to retained earnings.