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Required information [The following information applies to the questions displayed below.] Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to
Required information [The following information applies to the questions displayed below.] Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows, along with descriptions of items a through h that require adjusting entries on December 31. Additional Information Items a. An analysis of WTI's insurance policies shows that $2,939 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,547 are available at year-end. c. Annual depreciation on the equipment is $11,756. d. Annual depreciation on the professional library is $5,878. e. On September 1, WTI agreed to do five training courses for a client for $2,800 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $14,000 cash in advance for all five training courses on September 1, and WTI credited Unearned Revenue. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $7,450 of the tuition revenue has been earned by WTI. g. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Credit Cash Accounts receivable Teaching supplies $ 26,793 0 10,304 Prepaid insurance 15,458 Prepaid rent 2,062 Professional library 30,913 Accumulated depreciation-Professional library $ 9,275 Equipment 96,000 Accumulated depreciation-Equipment 16,489 Accounts payable 24,000 Salaries payable 0 Unearned revenue Common stock 14,000 15,851 Retained earnings Dividends Tuition revenue Training revenue Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense 84,000 41,220 105,108 39, 158 Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 0 0 49,464 0 22,682 0 7,214 5,771 $ 307,881 $ 307,881 Required: 1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 An analysis of WTI's insurance policies shows that $2,939 of coverage has expired. Note: Enter debits before credits. Transaction a. General Journal Debit Credit View general journal Record entry Clear entry >
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