Problem 12.2A (Algo) Recording adjustments for accrued and prepaid expense items and unearned income. LO 12-2, 12-3 On July 1, 20x1, Tim Stein established his own Financial Services Selected transactions for the first few days of July follow DATE TRANSACTIONS 20X1 July 1 signed a lease for an office and issued Check 101 for $13,050 to pay the rent in advance for six months. 1 Borrowed money from Second National Bank by issuing a four-month, 6 percent note for $36,000; received 535,280 because the bank deducted the interest in advance. 1 Signed an agreement with Carter Corp. to provide financial services for one year at 35,900 per month; received the entire fee of $70, 800 in advance. The $70,860 was credited to Unearned Financial Service Fees. 1 Purchased office equipment for $12,000 from Office Outfitters, issued a two-month, 12 percent note in payment. The equipment is estimated to have a useful life of six years and a $1,160 salvage value. The equipment will be depreciated using the straight-line method. 1 Purchased a one year insurance policy and issued Check 102 for $1,620 to pay the entire premium. 3 Purchased office furniture for $16,900 from Furniture Warehouse; issued Check 103 for $8,400 and agreed to pay the balance in 60 days. The equipment has an estimated useful life of five years and $1,600 salvage value. The office furniture will be depreciated using the straight-line method. 5 Purchased office supplies for $1,810 with Check 100. Assume $800 of supplies are on hand July 31, 20x1. Required: 1. Record the transactions in the general journal. Assume that the firm initially records prepaid expenses as assets and uneared income as a liability for the year 20X1 2. Record the adjusting journal entries that must be made on July 31 20x1. Analyze: What balance should be reflected in Unearned Financial Service Fees at July 31, 20%?? Complete this question by entering your answers in the tabs below. Required Required 2 Analyze Record the adjusting journal entries that must be made on July 31, 20x1 VIIUL LUIRLSRUUIU Complete this question by entering your answers in the tabs below. Required 1 Analyze Required 2 Record the adjusting journal entries that must be made on July 31, 20X1. View transaction list Journal entry worksheet 2 N 3 4 8 5 6 7 Record an adjusting entry for accounting fees earned. ses Note: Enter debits before credits General Journal Debit Credit Date Jul 31, 20X1 Record entry Clear entry View general Journal