Preparing Adjusting Entries Jake Thomas began Thomas Refinishing Service on July 1, 2019. Selected accounts are shown below as of July 31, before any adjusting entries have been made.

Unadjusted Account Balances	Debit	Credit
Prepaid rent	$5,700
Prepaid advertising	630
Supplies inventory	3,000
Performance obligation liability		$600
Refinishing fees revenue		2,500

Using the following information, prepare the adjusting entries necessary on July 31 (a) using the financial statement effects template and (b) in journal entry form. (c) Set up T-accounts for each of the ledger accounts, enter the balances above, and post the adjusting entries to them.

1. On July 1, the firm paid one years advance rent of $5,700 in cash. 2. On July 1, $630 cash was paid to the local newspaper for an advertisement to run daily for the months of July, August, and September. 3. Supplies still available at July 31 total $1,100. 4. At July 31, refinishing services of $800 have been performed but not yet recorded or billed to customers. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. 5. A customer paid $600 in advance for a refinishing project. At July 31, the project is one-half complete.

Prepaid Rent
Bal.	5,700
	Answer	Answer
Bal.	Answer	Answer

Prepaid Advertising
Bal.	630
	Answer	Answer
Bal.	Answer	Answer

Fees Receivable
	Answer	Answer

Supplies
Bal.	3,000
	Answer	Answer
Bal.	Answer	Answer

Refinishing Fees Revenue
Bal.		2,500
	Answer	Answer
	Answer	Answer
Bal.	Answer	Answer

Performance Obligation Liability
Bal.		600
	Answer	Answer
Bal.	Answer	Answer

Supplies Expense
	Answer	Answer

Advertising Expense
	Answer	Answer

Rent Expense
	Answer	Answer

• Financial statement effects template
• Journal entries
• T-accounts

General Journal
Ref	Description	Debit	Credit
1	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	To recordJuly rent expense.
2	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	To record July advertising expense.
3	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	To record supplies expense for July.
4	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	To record unbilled revenue earned in July.
5	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	AnswerRent expensePrepaid rentAdvertising expensePrepaid advertisingSupplies expenseSupplies inventoryFees receivableRefinishing fees revenuePerformance obligation liability	Answer	Answer
	To record advance fees earned in July.

Please answer all parts of the question.