Sel Strods opened a web consulting business called Landscape Dreams and recorded the following transactions in its first month of operations. Apr. 1 Strods invests $95,000 cash along with office equipment valued at $33,580 in the company in exchange for common stock. Apr. 2 The company prepaid $12,000 cash for twelve months' rent for office space. The company's policy is record prepaid expenses in balance sheet accounts. Apr. 3 The company made credit purchases for $8,600 in office equipment and $3,900 in office supplies. Payment is due within 18 days. Apr. 6 The company completed services for a client and immediately received $6,100 cash. Apr. 9 The company completed a $13,500 project for a client, who must pay within 30 days. Apr. 13 The company paid $12,500 cash to settle the account payable created on April 3. Apr. 19 The company paid $3,600 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts. Apr. 22 The company received $5,100 cash as partial payment for the work completed on April 9. Apr. 25 The company completed work for another client for $5,480 on credit. Apr. 28 The company paid $6,200 cash in dividends. Apr. 29 The company purchased $2,100 of additional office supplies on credit. Apr. 30 The company paid $3,300 cash for this month's utility bill. Descriptions of Items that require adjusting entries on April 30, follow. a) On April 2, the company prepaid $12,000 cash for twelve months' rent for office space. b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy the policy's coverage began on April 1. c) Office supplies on hand as of April 30 total $1,500. d) Straight-line depreciation of office equipment, based on a 5-year life and a $6,100 salvage value, is $600 per month. e) The company has completed work for a client, but has not yet billed the $2,400 fee. f) Wages due to employees, but not yet paid, as of April 30 total $3,300. Requirement General Journal General Ledger Trial Balance Income Statement St Retained Earnings Balance Sheet Impact on Income For transactions a-f, review the unadjusted balance and prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred. Each adjustment is posted automatically to the general ledger and trial balance as soon as you click "record entry". View transaction Bat View journal entry worksheet No Date Account Title 1 Apr 30 Rent expense Prepaid rent 2 Apr 30 Insurance expense Prepaid insurance Debit Credit 1,000 1,000 300 300 3 Apr 30 Office supplies expense Office supplies 1,500 1,500 4 Apr 30 Depreciation expense - Office equipment Office equipment 600 600 5 Apr 30 Accounts receivable Services revenue 6 Apr 30 Wages expense Wages payable 2,400 2,400 3,300 3,300 Adjusted Adjusting entry related to: a) Rent b) Insurance c) Office supplies d) Depreciation Account affecting the: Impact on net income Income Statement Balance Sheet Rent expense Prepaid rent $ (1,000) Insurance expense Prepaid insurance (300) Office supplies expense Office supplies 1,800 e) Unbilled fees f) Unpaid wages Depreciation expense - Office equipment Services revenue Wages expense Total impact on income due to adjustments Net income before adjustments Accumulated depreciation - Office equipment (600) Accounts receivable Wages payable 2,400 (3,300) $ (1,000) (1,100) Net income after adjustments $ (2,100) Had the adjustments not been prepared, income would have been overstated by (47.6)%