Exercise 2-19 Preparing financial statements from a trial balance Lo6

CHECK FIGURES:Profit=$770;Total assets=$3,170

Cycle Travel Tours showed the following trial balance information(in alphabetical order)for its first month

just ended March 31,2020:

Account

Debit

Credit

Accounts payable.

430

Accounts receivable.

1,880

Cash.

430

Equipment.

630

Interest expense..

10

Francois Laneuv,capital

1,980

Francois Laneuv,withdrawals

1,430

Notes payable.

1,030

Prepaid insurance

230

Salaries expense.

730

Service revenue..

1,510

Unearned service revenue

390

Totals..

5,340

5.340

Problem 3-1A Preparing adjusting entries (monthly)-prepaid expenses L04 Willow Window Washing Services prepares adjustments monthly and shows the following selected accounts on its December 31, 2020, unadjusted trial balance: Account Debit Credit Prepaid insurance Prepaid office rent. Prepaid subscriptions... Prepaid equipment rental. $ 3.720 23,000 1,300 26,320 Required Prepare the required monthly adjusting entries at December 31, 2020, based on the following additional information: a. The remaining balance in Prepaid Insurance was for a six-month insurance policy purchased for $7,440 and in effect on September 1, 2020. b. $5,200 of the balance in Prepaid Office Rent had not been used as at December 31, 2020. c. $1,140 of the balance in Prepaid Subscriptions had been used as at December 31, 2020. d. The company paid $33,840 on April 1, 2020, to rent equipment for a three-year period beginning April 1, 2020 Analysis Component: If the above adjustments were not recorded, identify the types of accounts that would be affected and if they would be over- or understated