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You have been given an unadjusted Trial Balance at the end of Alico Inc. FY ( 1 2 / 3 1 / XX ) :
You have been given an unadjusted Trial Balance at the end of
Alico Inc. FY XX: In reviewing the unadjusted Trial Balance,
the following information has come to your attention:
a Alico Inc. entered into a sixmonth contract on XX to provide
maintenance service for six apartment houses owned by a Real
Estate Investment Trust. The total value the contract was $
and required a $ prepayment. On XX the bookkeeper
debited cash and credited Maintenance Revenue for the $
prepayment. On XX of the contracted services had been
completed.
b On XX a one year fire insurance policy was purchased for
$ The bookkeeper debited Prepaid Insurance Expense and
credited Cash to record the transaction. No other journal entries
had been made for this transaction.
c Wages in the amount of $ had been earned by Alico Inc.
employees but will not be paid until next year. No entry had been
made to record this fact.
d On XX Alico Inc. lent $ to one of its clients and the
client signed a day note receivable on this date with interest and
principal due and payable on January of the next year. The
interest rate was at per year. At the end of the current year
Alico Inc. had earned $ in interest on the note. This amount
had not yet been recorded.
e Depreciation in the amount of $ had not yet been recorded.
Required: Make the required adjusting entries on XX from the
information given above. As a journal description, indicate what
accounting principle that would have been violated if the adjusting entry
had not been made. Use the journal paper on the next page to make your
journal entries.
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