Identification and Preparation of Adjusting Entries

Kuepper's Day Care is a large daycare center in South Orange, New Jersey. The daycare center serves several nearby businesses as well as a number of individual families. The

businesses pay $$6,180$ per child per year for daycare services for their employees' children. The businesses pay in advance on a quarterly basis. For individual families, daycare

services are provided monthly and billed at the beginning of the next month. The following transactions describe Kuepper's activities during December:

Required:

Identify whether each transaction is an adjusting entry or a regular journal entry. If the entry is an adjusting entry, identify it as an accrued revenue, accrued expense,

deferred revenue, or deferred expense. If the entry is a regular journal entry, select "not applicable" from the second set of dropdowns.

a$.$ On December $1,$ Kuepper borrowed $$50,000$ by issuing a $5-$year, $$50,000,9\%$ note payable.

Reqular journal entry $$ Not applicable $$

b$.$ Daycare service in the amount of $$13,390$ was provided to individual families during December. These families will not be billed until next January.

Adjusting entry

Accrued revenue $$

c$.$ At December $1,$ the balance in unearned service revenue was $$26,780.$ At December $31,$ Kuepper determined that $$10,300$ of this revenue was still unearned.

d$.$ On December $31,$ the daycare center collected $$40,170$ from businesses for services to be provided in $2020.$

Reqular journal entry

e$.$ On December $31,$ the center recorded depreciation of $$1,875$ on a bus that it uses for field trips.

f$.$ The daycare center had prepaid insurance at December $1$ of $$3,600.$ An examination of the insurance policies indicates that prepaid insurance at $$3,000.$

Adjusting entry $$ Deferred expense

Prepare the entries necessary to record the above transactions. If an amount box does not require an entry, leave it blank.

Dec. $31$

Notes Payable $$

Dec. $1$

$$

$x$

$$

Dec. $31$

Dec. $31$

$$

Service Revenue

$$

$$

$$

$$

Dec. $31$

Accumulated Depreciation $$

Dec. $31$ Insurance Expense $$

Dec. $31$

$$