Expense Adjustments

Faraday Electronic Service repairs stereos and DVD players. During 2019, Faraday engaged in the following activities:

1. On September 1, Faraday paid Wausau Insurance $8,520 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance.
2. At December 31, Faraday estimates that $1,790 of utility costs are unrecorded and unpaid.
3. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $2,770 is unpaid and unrecorded at December 31.
4. In late October, Faraday agreed to become the sponsor for the sports segment of the evening news program on a local television station. The station billed Faraday $6,300 for 3 months' sponsorshipNovember 2019, December 2019, and January 2020in advance. When these payments were made, Faraday debited prepaid advertising. At December 31, 2 months' advertising has been used and 1 month remains unused.

Required:

1. Prepare adjusting entries at December 31 for these four activities.

Dec. 31		fill in the blank a1cf7707e014fb0_2
			fill in the blank a1cf7707e014fb0_4
	(Record use of prepaid insurance)
Dec. 31		fill in the blank a1cf7707e014fb0_6
			fill in the blank a1cf7707e014fb0_8
	(Record use of utilities)
Dec. 31		fill in the blank a1cf7707e014fb0_10
			fill in the blank a1cf7707e014fb0_12
	(Record use of equipment)
Dec. 31		fill in the blank a1cf7707e014fb0_14
			fill in the blank a1cf7707e014fb0_16
	(Record use of prepaid advertising)

2. Conceptual Connection: What would be the effect on expenses if the adjusting entries were not made?

a.
b.
c.
d.
	Cumulative effect on expenses: by $fill in the blank b7bd7b0cdfe0074_6