For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Tao Co. receives $11,100 cash in advance for four months of evenly planned legal services beginning on October 1. Tao records it by debiting Cash and crediting Unearned Revenue both for $11,100. It is now December 31, and Tao has provided legal services as planned. What adjusting entry should Tao make to account for the work performed from October 1 through December 317 Unearned revenue Step 1: Determine what the current account balance equals. Step 2. Determine what the current account balance should equal Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 b. Caden started a new publication called Contest News. Its subscribers pay $36 to receive 12 monthly Issues with every new subscriber, Caden debits Cash and credits Unearned Subscription Revenue tar the amounts received. The company has 100 new subscribers as of July 1. It sends Contest News to each of these subscribers every month from July through December. Assume no changes in subscribers, prepare the year-end Journal entry that Caden must make as of December 31 to adjust the Subscription Revenue account and the Unearned Subscription Revenue account. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. b. Caden started a new publication called Contest News. Its subscribers pay $36 to receive 12 monthly issues. With every new subscriber, Caden debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100 new subscribers as of July 1. It sends Contest News to each of these subscribers every month from July through December. Assume no changes in subscribers, prepare the year-end journal entry that Caden must make as of December 31 to adjust the Subscription Revenue account and the Unearned Subscription Revenue account. Unearned subscription revenue Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Record adjusting journal entries for each of the following for year ended December 31, Assume no other adjusting entries are made during the year. a. Salaries Payable. At year-end, salaries expense of $25,500 has been incurred by the company, but is not yet paid to employees b. Interest Payable. At its December 31 year-end, the company owes $750 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year. c. Interest Payable. At Its December 31 year-end, the company holds a mortgage payable that has incurred $1,375 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year. View transaction list Journal entry worksheet 1 2 3 At year-end, salaries expense of $25,500 has been incurred by the company, but is not yet paid to employees. Note: Enter debits before credits. Transaction General Journal Debit Credit a
