Question: For each of the following situations prepare the adjusting entry

For each of the following situations, prepare the adjusting entry for the month ended October 3l and indicate the effect each adjustment would have on net income:
A. Wingenbach Plumbing had a $35,000 contract with a construction company to perform plumbing services for a home under construction. Payment was to be received at the end of the job. As of October 31, $8,000 worth of services had been performed.
B. Hutchison State Bank made a $10,000 loan to a customer on October 1. The terms called for principal and interest of 8 percent to be paid at the end of one year. Hutchison State Bank prepares monthly financial statements.
C. Davis, Inc., a real estate company, rents office space to a lawyer for $1,200 per month. The invoice for October had not been sent as of October 31.

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  • CreatedMarch 25, 2015
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