E3-32. Preparing and Journalizing Adjusting Entries

For each of the following separate situations, prepare the necessary adjustments (a) using the finan-

cial statement effects template, and (b) in journal entry form.

1. Unrecorded depreciation on equipment is $610.

2. On the date for preparing financial statements, an estimated utilities expense of $390 has been

incurred, but no utility bill has yet been received or paid.

3. On the first day of the current period, rent for four periods was paid and recorded as a $2,800

debit to Prepaid Rent and a $2,800 credit to Cash.

4. Nine months ago, the

Hartford Financial Services Group sold a one-year policy to a customer

and recorded the receipt of the premium by debiting Cash for $624 and crediting Contract

Liabilities for $624. No adjusting entries have been prepared during the nine-month period.

Hartfords annual financial statements are now being prepared.

5. At the end of the period, employee wages of $965 have been incurred but not yet paid or

recorded.

6. At the end of the period, $300 of interest income has been earned but not yet received or recorded