Part I. The December 31, 2015, unadjusted trial balance of Pilsner Inc. included the following selected accounts (the company adjusts its accounts annually):

Required: Prepare the necessary year-end adjusting entries as of December 31, 2015, assuming no adjusting entries have been made since the previous fiscal year-end.

Accounts receivable $176,000

Unearned service revenue 24,000

Prepaid rent 69,000

Prepaid insurance 36,000

Equipment 280,000

Accumulated depreciation-equipment 30,000

Salary expense 130,000

Additional data:

One-third of the revenue received in advance has been earned by December 31, 2015.

The prepaid insurance represents the annual premium on a policy providing coverage starting September 1, 2015.

Since the last payday, employees have earned an additional $2,500 which has not yet been paid or recorded.

The equipment has an estimated life of 10 years and no expected value at the end of its life.

Services performed but unbilled and uncollected at year end amount to $6,500.

The prepaid rent relates to one-half of a year beginning on October 1, 2015.

Part II. The following information was available on December 31, 2015, the end of ABC Companys annual accounting period. For each of the items below, make ALL NECESSARY journal entries AND adjusting entries. The company adjusts its accounts annually.

During the year, the company agreed to provide certain consulting services to a client for a fee of $10,000, which was received in advance on Jan 1, 2015. At the end of the year, it was estimated that 80% of the services has been provided.

Jan 1. Journal Entry:

Dec 31. Adjusting Entry:

The company rents some surplus space on its building to a tenant for $1,500 per quarter, payable in advance. The agreement began on August 1, 2015, and the tenant paid $1,500 on that date and an additional $1,500 on November 1.

Aug 1 Journal Entry:

Oct 31 Adjusting Entry:

Nov 1.. Journal Entry:

Dec 31.. Adjusting Entry:

Another tenant rents space in the companys building for $600 per month, due on the first day of each month. The agreement began two years ago (on Jan 1, 2014) and the tenant has paid the rent as scheduled every month, except for the most recent one. At the year end, the rent for December 2015 was still outstanding.

Dec 31 .Adjusting Entry:

4. On February 1, 2015, the company purchased a three-year fire insurance policy for $3,600.

Feb 1.. Journal Entry:

Dec 31. Adjusting Entry:

5. On April 1, 2015, the company paid $2,400 to the local newspaper for advertising space. The newspaper agreed to publish ads each month for one year, beginning in April 2015.

April 1 .Journal Entry:

Dec 31 ..Adjusting Entry:

6. On June 1, 2015, the company received $12,000 in advance for a special order which was to be delivered in 2 equal but separate shipments one prior to the end of the current year and the other one to be delivered early in the next year.

June 1.. Journal Entry:

Dec 31 ..Adjusting Entry:

7. On August 1, 2015, the company borrowed $10,000 from a bank and signed a one-year, 12% note. No interest has been paid or recorded yet.

Aug 1.Journal Entry:

Dec 31 ..Adjusting Entry:

8. On October 1, 2015, the company received $6,000 of rent in advance for one year, for storage space that it leases to another company. Rental starts from Nov 1, 2015.

Oct 1. Journal Entry:

Dec 31 ..Adjusting Entry:

9. As of December 31, 2015, employees have earned wages of $775 that the company has not yet paid or recorded.

Dec 31 ..Adjusting Entry:

10. As of December 31, 2015, additional revenue was earned, but not yet collected or recorded totaling $1,300.

Dec 31 ..Adjusting Entry: