Hong Corporation encounters the following situations:
1. Hong collects $1,300 from a customer in 2017 for services to be performed in 2018.
2. Hong incurs utility expense which is not yet paid in cash or recorded.
3. Hong’s employees worked 3 days in 2017 but will not be paid until 2018.
4. Hong performs services for customers but has not yet received cash or recorded the transaction.
5. Hong paid $2,400 rent on December 1 for the 4 months starting December 1.
6. Hong received cash for future services and recorded a liability until the service was performed.
7. Hong performed consulting services for a client in December 2017. On December 31, it had not billed the client for services provided of $1,200.
8. Hong paid cash for an expense and recorded an asset until the item was used up.
9. Hong purchased $900 of supplies in 2017; at year-end, $400 of supplies remain unused.
10. Hong purchased equipment on January 1, 2017; the equipment will be used for 5 years.
11. Hong borrowed $10,000 on October 1, 2017, signing an 8% one-year note payable.

Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2017.

  • CreatedMarch 02, 2015
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