On December 31, the unadjusted trial balance of Masters Employment Agency shows the following selected data:

Prepareand post adjusting, closing, reversing, and subsequent entries.

Accounts receivable$24,000

Cash$7,600

Interest expense 7,800

Service revenue 92,000

I. Masterson, capita l48,000

Interest payable 0

Analysis shows that adjusting entries are required to (1) accrue $6,900 of service revenue, and (2) accrue $1,250 of interest expense.

Instructions

a.Prepareand post (1) the adjusting entries and (2) the closing entries for the temporary accounts at December 31.

b.Prepareand post reversing entries on January 1.

c.Prepareand post the entries to record:

1. the collection of $8,200 of service revenue (including the accrued service revenue from December 31) on January 10, and
2. the payment of $2,235 interest on January 31 (consisting of the accrued interest from December 31 plus January's interest).