Instructions

(a) For each of the above transactions, prepare the journal entry to record the initial transaction.

(b) For each of the above transactions, prepare the adjusting journal entry that is required on August 31.

(c) Post the journal entries in parts (a) and (b) to T accounts and determine the final balance in each account balance. Posting to the Cash account is not required.

Prepare adjusting entries for depreciation; calculate carrying amount.

Winds Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2024: 1. Purchased a one-year insurance policy on June 1 for $2,880 cash. 2. Paid $7,150 on August 31 for five months' rent in advance. 3. On September 4, received $4,680 cash in advance from a corporation to sponsor a game each month for a total of nine months for the most improved students at a local school. 4. 5. Signed a contract for cleaning services starting December 1. for $1,130 per month. Paid for the first two months on November 30. (Hint: Use the account Prepaid Cleaning to record this prepayment.) On December 5, received $1,590 in advance from a gaming club. Determined that on December 31, $620 of these games had not yet been played.