Emery Corporation encounters the following situations. Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued revenue, or accrued expense) is needed on December 31, 20X1 in each situation and why. (a) Emery paid and recorded $4,000 rent on December 1, 20X1 for the next 4 months starting December 1. Type - Why - (b) Emery received $3,000 cash for future services to be preformed and recorded a liability at the time the cash was received. As of Dec. 31, 20X1, half of this has been earned. Type - Why - (c) Emerys employees worked 3 days in 20X1, but the $1,500 the company owes them will not be paid until 20X2. Type - Why - (d) Emery earned $2,500 of revenues but has not yet recorded the transaction or received the cash. Type - Why - (e) Emery collected $2,500 cash from a customer in November 20X1 for services to be performed in 20X2. Type - Why - (f) Emery paid $1,200 cash on July 1, 20X1 for 12 months of insurance expense and recorded it as an asset. Type - Why - (g) Emery performed services worth $2,000 on December 28, 20X1 and billed the customer on January 3, 20X2. Type - Why - (h) Emery received a utility billing of $800 in January 20X2 for the utilities used in December 20X1. Type - Why - (i) Emery had $900 of supplies available in December 20X1 of which, at year end, $200 of the supplies remains unused. Type - Why - (j) Emery purchased machinery for $10,000 on January 1, 20X1; the company thinks the equipment will be used for the next 5 years helping the company earn revenue. Type - Why - (k) Emery borrowed $10,000 on October 1, 20X1 by signing an 12% one-year note payable. Interest = $300 = $10,000*12%*(3/12) (P*R*T) Type - Why

The situations in Exercise #4 that will be requiring an adjusting entry at the 20X1 year end are: a,b,c,d,f,g,h,i,j,&k. The remaining situation was properly handled when it was journalized and does not require an entry at the end of the year to adjust. (a) Prepare the adjusting entry in the following journal. Posting References are not needed because you will not post these. Omit explanations and skip lines between entries. (b) After making the adjusting entries required, how much will the Net Income change (Increase? Decrease?) ________