P3.7A (LO 2 , 3) AP Melody Lane Co.

provides music lessons ot many clients across the city. The following

information is available to be used in

recording annual adjusting entries at the company's September 30, 2024, vear

end:

.1 On September 30, 2023, the company had a balance of $2,080 in its Supplies account. Additional supplies were purchased during the year totalling $1,700. The supplies

inventory o n September 30, 2024. amounts t o $810.

.2 On November 1, 2023, Melody Lane purchased aone-vearinsurance

policy for $3,200.

3. On January 2, 2024, aclient paid $1,800 for six months of lessons

starting April 2, 2024.

4. On Februarv .1 2024. Melodv Lane

purchased a grand piano (to be used in music lessons) for $24,000. The piano's estimated useful life is 12

years.

5. OnMay1,2024,MelodyLane borrowed $25,000 from the bank and signed a 10-month, 4% note payable. Interest and principal are to be paid at maturity.

6. On August ,1 2024, Melody Lane signed a contract with a

neighbourhood school to provide weekly piano lessons to some of its students for a fee of $2,000 per month. The contract called for lessons to start the beginning of September. The school has not vet beensentaninvoicefor the entire

month of September.

7. On August 15, 2024, the company paid $9,000 to Pinnacle Holdings to

rent additional studio space for nine months starting September 1. MelodyLanerecordedt h efull

payment as Prepaid Rent.

8. Melody Lane's instructors have earned salaries of $3.500 for the last week of September 2024. This amount will be paid to the instructorso nt h enextpaydayin October.

9.

Music lessons were provided to a local church group for $1.500 on September 30, 2024. Melody Lane

has not vet invoiced the group or recorded the transaction.

10. In early October 2024, Melody Lane received an invoice for $895 from

the utility company for September utilities. The amount has not vet

been recorded or paid. Instructions

Preparetheadjustingentries.

Taking It Further Is it better to prepare monthly adjusting entries or annual adjusting entries as Melody Lane

does? Why?

Prepare adjusting entries.