The trial balance before adjustment of Viva Marketing Services at the end of the it's first month of operations follows:

Viva Marketing Services
Trial balance
June 30, 20x5
	Debit		Credit
Cash	$ 6,000
Prepaid Insurance	14,400
Office Supplies	1,300
Office Equipment	98,000
Note Payable			$ 42,000
Unearned Service Revenue			16,000
A. Viva, Capital			57,000
A. Viva, Drawings	4,000
Service Revenue			30,800
Salaries Expense	18,000
Advertising Expense	1,600
Equipment Maintenance Expense	900
Rent Expense	1,600
	$ 145,800		$ 145,800

Required:

 adjust a journal entry from the data and events listed below, at June 30, 20X5. Use any appropriate accounts you feel are necessary. Explanations to the journal entries are not required, but details to any calculations must be provided.

 

Record the subsequent cash transaction for the interest on the Note Payable in May 31 20X6. The company did not record any further entries to accrue interest during the period Jun 30 20X5 and May 31, 20X6.

 

Details of events and additional information:

1. The insurance policy valued at $14,400 has a one-year term beginning June 1, 20X5.

2. The equipment has a useful life if 10 years with no residual value.

3. The note payable was issued on June 1, 20X5 to purchase the equipment and is due on June 1, 20X8. The annual interest on the note is $2,100. The payment of $2,100 was made in full on May 31, 20X6.

4. Deposits received in advance of marketing services being provided were collected from customers during the month of June and recorded to Unearned Service Revenue.One quarter of the total amount received was determined as having been earned by June 30.

5. Employees are paid a combined total of $250 per day. At June 30, four days' salaries are unpaid.

6. A count of office supplies at June 30 shows $900 of office supplies on hand.

7. Unbilled but earned fees at June 30 amounted to $3,000.