Problem

Now it is time to make some adjusting journal entries. Based on what you learned in the text using the Sample Company, you are to make the following changes to the Case 2 company you modified in Chapter 8:

Record the appropriate adjusting journal entries on 1/31/19 based on the following:

a. An inventory of supplies reveals that only $200 of supplies remain as of 1/31/19.

b. $1,800 of prepaid expenses expired (representing prepaid insurance) in the month of January.

c. A bill for $750 was received and recorded in the next month for legal fees performed in the current month. Create a new liability account as you did earlier in the chapter.

d. Custom painting services recorded on invoice #1003 for $4,500.00 to Hagen's toys were never performed even though invoiced. Thus, the revenue had not been earned. Create a new liability account as you did earlier in the chapter.

e. Repair services of $6,298 were performed on the last day of the month for a new customer: Kelly's Awesome Copters but not invoiced to the customer or recorded into the accounting records until a few days into the next month. Create a new asset account as you did earlier in the chapter.

f. Depreciation Expense of $1,000 ($375 and $625 for Furniture and Machinery & Equipment, respectively) needed to be recorded for the month. Before recording this journal entry edit the "Depreciation" expense account so the new name is "Depreciation Expense." Also, change the account title for Machinery & Equipment accumulated depreciation from "Depreciation" to "Accumulated Depreciation" like you did earlier in the chapter.