Apply the accrual basis of accounting to correctly create adjusting entries in the preparation of financial statements:

A. Step Five: Prepare the unadjusted trial balance. Note that you should use the T account balances completed in the previous step to prepare the unadjusted trial balance portion of the Trial Balance tab in your workbook.

B. Step Six: Complete the Adjusting Entries tab in your workbook using the Step Six data (SEE BELOW, I ATTACHED A PICTURE OF IT). Note that you should take the adjusting entries from this worksheet and enter them into the Trial Balance tab in your workbook.

C. Step Seven: Apply adjusting entries to create the adjusted trial balance. Note that the adjusting entries from Step Six will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance.

STEP SIX DATA:

Step Six Data (Click on the link to return to the prompt.) On September 30, the following adjustments must be made [Note: This is a sample.] Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.) . Record insurance used for the year. Actual baking supplies on-hand as of September 30 are $1,100 Office supplies on-hand as of September 30 are $50 Wage calculation data Month Hours Rate 31 Jul. 10 15 Aug. 40 31 Aug. 35 15 Sep. 38 30 Sep. 40 12 12 12 12 12 Pay 120 480 420 456 480 Step Six Data (Click on the link to return to the prompt.) On September 30, the following adjustments must be made [Note: This is a sample.] Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.) . Record insurance used for the year. Actual baking supplies on-hand as of September 30 are $1,100 Office supplies on-hand as of September 30 are $50 Wage calculation data Month Hours Rate 31 Jul. 10 15 Aug. 40 31 Aug. 35 15 Sep. 38 30 Sep. 40 12 12 12 12 12 Pay 120 480 420 456 480