The Wheel Place Inc. began operations on March 1 of the current year to provide automotive wheel alignment and balancing services. On March 31 the unadjusted balances of the firm's accounts are as follows:

The following information is also available:

1) The balance in Prepaid Rent was the amount paid on March 1 to cover the first four months rent.

2) Supplies on hand on March 31 amount to $1,200.

3) The equipment has an estimated life of seven years with a salvage value of $2,000.

4) The company has 3 employees who in total are paid 3,750 for the week. March 31, 2010 falls on a Wednesday.

5) Utility services used during March were estimated at $480. A bill is expected early in April.

6) The balance in Unearned Service Revenue was the amount received on March 15 from a new car dealer to cover alignment and balancing services on all new cars sold by the dealer in March and April. Wheel Place agreed to provide the service at a fixed fee of $350 each month.

REQUIRED:

a) Prepare the necessary adjusting entries at March 31, 2010 on the General Journal paper supplied.

b) (Bonus Marks) Prepare the journal entry on April 2, 2010 to record the payment of the wages to the employees listed in information item #4 above. (assume the company does not use reversing entries)

NOTE: Type your journal entries below

Date Accounts & Explanations Debit Credit

The Wheel Place Inc. Trial Balance March 31, 2010 DR $2.900 4,350 4,000 25.100 Cash Accounts Receivable Supplies Prepaid Rent Equipment Accumulated Amortization - Equipment Accounts Payable Uneared Service Revenue Capital Stock Service Revenue Amortization Expense - Equipment Rent Expense Supplies Expense Wages Expense $ 0 2,400 700 29.000 10 550 2,600 3.700 $ 41,850 $ 41,850