QS 3-4

a. To record revenue earned that was previously o record wages expense incurred but not yet paid (nor recorded) lo record revenue earned but not yet billed (nor recorded) d. To record expiration of prepaid insurance record annual depreciation expense. During the year, a company recorded prepayments of expenses in asset accounts, and cash receipts of unearned revenues in liability accounts. At the end of its annual accounting period, the company must as 3-4 Concepts of adjusting entries make three adjusting entries. r. P1 (2) Adjust the Unearned Services Revenue account to recognize earned revenue. (3) Record services revenue earned for which cash will be received the following period. . . ...... Dr Dr. Cr For each of the adjusting entries (1), (2), and (3), indicate the account to be debited and the account to be to be aiod credited. from a through below. a. Prepaid Salaries b. Cash c. Salaries Payable Unearned Services Revenue e. Salaries Expense f. Services Revenue g. Accounts Receivable h. Accounts Payable i. Equipment each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting to step 2. Assume no other adjusting entries are made during the year a. Prepaid Insurance. The Prepaid Insurance account has a $4,700 debit balance to start the year os 3-5 Prepaid (d expense P1 entry to get from step 1 A review of insurance policies and payments shows that $900 of unexpired insurance remains year-end. A review of insurance policies and payments shows $1,040 of insurance has expired by year-end rent for facilities being occupied that day. The company debited Prepaid Rent and credited b. Prepaid In surance. The Prepaid Insurance account has a $5,890 debit balance a t the start of the year c. Prepaid Rent. On September 1 of the current year, th e company prepaid $24,000 for two years