The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses. The unadjusted trial balance for Brown Inc. follows. Unadjusted Trial Balance December 31 Account Cash Accounts receivable Prepaid lease expense Supplies Equipment Accumulated depreciation-Equipment Accounts payable Note payable Common stock Retained earnings Dividends Service revenue Interest expense Salaries expense Utility expense Miscellaneous expense Totals Debit $12,640 $ 12,000 38,400 22,000 40,000 20,000 Credit 6,000 4,000 16,000 40,000 16,000 100,000 960 26,000 4,000 6,000 $182,000 $182,000 Additional information for accounting adjustments 1. Brown was required to pay the entire rental for a one-year lease beginning July 1 for $26,400 cash. Brown recorded the payment as a debit to Prepaid Lease Expense. Hint: At year-end, there are no other short-term leases to account for besides the lease described here. 2. A year-end count revealed $4,000 of supplies still available. 3. Annual depreciation expense on the equipment is $2,000. 4. Unpaid and unrecorded salaries is $4,000 at year-end. 5. The note payable calls for annual interest of 8%, payable each September 30. The principal amount of the note is not due for several years. a. Record the required adjusting journal entries. b. Prepare the adjusted trial balance. c. Prepare the income statement for the year and the balance sheet at year-end. d. Prepare the closing entries, using the Income Summary account to close out revenues and expenses.