- On June 30 of the current calendar year, Apricot Co. paid $9,500 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to expense accounts at the time of cash payment.

Required:

1- Prepare the adjusting entry on December 31 for Apricot Co.

2- Show the effect of the adjusting entry on Income statement and balance sheet at the end of the

Current calendar year