The following account balances pertain to the Henryville Manufacturing Co. at September 30, 2016 (before adjusting entries).

Debit Credit

Accounts Receivable .................................................................... $ 40,000

Allowance for Doubtful Accounts credit balance in an Asset..................................... $ 2,500

Inventory ....................................................................................... 99,700

Prepaid Insurance ...................................................................... 2,400

Equipment .................................................................................... 300,000

Accumulated Depreciation .......................................................................................... 125,000

Notes Payable .............................................................................................................. 48,000

Unearned Revenue ( a liability since we were paid cash in advance of the sale.......... 72,000

Additional information:

(a) The controller and the credit manager agreed that, based on an aging of year-end accounts receivable, the allowance for doubtful accounts should be increased to $4,300, remember you have a beg. balance.

(b) The credit manager determined that a customer account with a balance of $850 was uncollectible (without regard to the information in (a) above).

(c) The $48,000 note payable is dated August 13, 2016, and bears interest at 12 percent per annum. The note and interest are payable at maturity on November 13, 2016. (Assume a 365-day year and round to the nearest dollar and since it is now 9/30 there is 48 days accrued interest on the note.)

(d) The prepaid insurance balance arose from the payment of an annual premium on January 1, 2016.

(e) The company maintains a perpetual inventory system. The inventory at September 30, 2016, was $102,600 as determined by physical count.

(f) The equipment is being depreciated over a 20-year estimated useful life with no salvage value.

(g) The unearned revenue represents an amount received for a long-term equipment rental to the NorthWest Tool & Die Co. The cash ($72,000) was received on April 26, 2012, and represents prepayment of a 1-year rental beginning May 1, 2016.

Prepare adjusting entries to Henryville Co.'s accounts at September 30, 2016. Each entry should be made in general journal format. Identify each entry by using the letter of the paragraph containing the additional information for the entry.

Prepare an adjusted trial balance for Henryville Co. at September 30, 2016. Prepare closing entries to Henryville Co.'s accounts at September 30, 2016. Each entry should be made in general journal format an Henryville uses the Income Summary account as a temporary account. It is closed to the Retained Earnings account.