Each of the following independent events requires a year end adjusting
Each of the following independent events requires a year-end adjusting entry. Show how each event and its related adjusting entry affect the accounting equation. Assume a December 31 closing date. The first event is recorded as an example.
a. Paid $6,000 cash in advance on April 1 for a one-year insurance policy.
b. Purchased $2,400 of supplies on account. At year’s end, $200 of supplies remained on hand.
c. Paid $7,200 cash in advance on March 1 for a one-year lease on office space.
d. Received an $18,000 cash advance for a contract to provide services in the future. The contract required a one-year commitment starting September 1.
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