On July 1, 2019, Tim Stein established his own accounting practice. Selected transactions for the first few days of July follow.

DATE		TRANSACTIONS
July	1	Signed a lease for an office and issued Check 101 for $12,000 to pay the rent in advance for six months.
	1	Borrowed money from Second National Bank by issuing a four-month, 12 percent note for $42,400; received $40,704 because the bank deducted the interest in advance.
	1	Signed an agreement with Carter Corp. to provide accounting and tax services for one year at $5,200 per month; received the entire fee of $62,400 in advance.
	1	Purchased office equipment for $23,000 from Office Outfitters; issued a two-month, 12 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,400 salvage value. The equipment will be depreciated using the straight-line method.
	1	Purchased a one-year insurance policy and issued Check 102 for $1,704 to pay the entire premium.
	3	Purchased office furniture for $11,560 from Furniture Warehouse; issued Check 103 for $8,460 and agreed to pay the balance in 60 days. The equipment has an estimated useful life of four years and a $1,000 salvage value. The office furniture will be depreciated using the straight-line method.
	5	Purchased office supplies for $1,950 with Check 104. Assume $870 of supplies are on hand July 31, 2019.

Required:

Record the transactions in the general journal. Assume that the firm initially records prepaid expenses as assets and unearned income as a liability for the year 2019.

Record the adjusting journal entries that must be made on July 31, 2019.

Analyze: What balance should be reflected in Unearned Accounting Fees at July 31, 2019?

Record the adjustment for rent.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for interest paid in advance.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for accounting fees earned.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for interest on the note payable.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for depreciation on the equipment.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for insurance expired.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for depreciation on the furniture.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

Record the adjustment for supplies.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jul 31, 2019

What balance should be reflected in Unearned Accounting Fees at July 31, 2019?

Unearned accounting fees, July 31, 2019