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E4-19B On December 31, the adjusted trial balance of E-Z Employment Agency shows the following selected data.
Accounts Receivable $25,000 Service Revenue $90,000
Interest Expense 7,500 Interest Payable 1,800
Analysis shows that adjusting entries were made to

(1) accrue $4,300 of service revenue  and (2) accrue $1,800 interest expense.


Instructions


(a) Prepare the closing entries for the temporary accounts shown above at December 31.
(b) Prepare the reversing entries on January 1.
(c) Post the entries in (a) and (b). Rule and balance the accounts. (Use T accounts.)
(d) Prepare the entries to record (1) the collection of the accrued revenue on January 10
and (2) the payment of all interest due ($2,700) on January 15.
(e) Post the entries in (d) to the temporary accounts.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M939581

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