Question
Gomez Co. had the following transactions in the last two months of its year ended December 31. Nov. 1 Paid $2,200 cash for future newspaper
Gomez Co. had the following transactions in the last two months of its year ended December 31. |
Nov. | 1 | Paid $2,200 cash for future newspaper advertising. |
| 1 | Paid $3,600 cash for 12 months of insurance through October 31 of the next year. |
| 30 | Received $8,600 cash for future services to be provided to a customer. |
Dec. | 1 | Paid $5,700 cash for a consultants services to be received over the next five months. |
| 15 | Received $9,450 cash for future services to be provided to a customer. |
| 31 | Of the advertising paid for on November 1, $1,050 worth is not yet used. |
| 31 | A portion of the insurance paid for on November 1 has expired. No adjustment was made in November to Prepaid Insurance. |
| 31 | Services worth $1,100 are not yet provided to the customer who paid on November 30. |
| 31 | One-fifth of the consulting services paid for on December 1 have been received. |
| 31 | The company has performed $3,500 of services that the customer paid for on December 15. |
Required: | |||||
1. | Prepare entries for these transactions under the method that records prepaid expenses as assets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year. | ||||
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