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.

  • CreatedMarch 25, 2015
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