Adjusting Entries

Prepare the necessary adjusting entries for the monthly financial statements for October

1. Prepaid Expenses: An analysis of the insurance policy paid on 10/4 reveals that $500 ($6,000/12) of insurance expires each month.

*But, how would your answer change if the original entry had debited Insurance Expense instead of Prepaid Insurance?

2, Prepaid Expenses: An inventory count at the close of business on 10/31 reveals that $10,000 of supplies are still on hand.

*** But, how would your answer change if the original entry had credited Service Revenue instead of Deferred Service Revenue?

4, Accrued Receivables: In October Pioneer earned $2,000 for advertising services that it did not bill to clients before 10/31.

5, Accrued Liabilities: Accrue interest for the $50,000 note payable signed on 10/1.

6, Accrued Liabilities: Employees receive total salaries for a 5day work week, or $2,000 per day. Accrue salaries that have been incurred since the 10/26 pay day.

On November 23, Pioneer will again pay total salaries of $40,000. What entry will they record at that time?

7, Estimate: Pioneer estimates a $2,000 salvage value and a 10 year useful life for its equipment that it purchased on 10/1.

8, Estimate: Pioneer estimates bad debt expense of $1,600.