LRB Consulting, owned by Lennox Bronson, has a December 31 year-end. On January
20, 2015, all invoices and related information were provided for posting year-end
adjusting entries. The prepaid expense accounts in the trial balance, shown below,
have not been adjusted during the year. The information is as follows.
a. On October 1, 2014, LRB began a three-and€“a-half-year service contact to supply
consulting services at an annual rate of $56,496. Invoicing is to be done quarterly.
b. On December 31, 2014, LRB received a $6,000 deposit for services to be rendered
in February. The total value of the services to be rendered is $36,000. No entry has
been made for this transaction.
c. Depreciation for 2014 has not been recorded. The expected lives for the assets listed
on the trial balance are shown below. No assets have been purchased or sold in the
current year. Complete a compound journal entry.

d. Business insurance and auto insurance were purchased and paid for. The insurance
coverage begins on January 1, 2014, and March 1, 2014, respectively. Both policies
are for 12-month periods.

Instructions
1. Journalize the adjusting and correcting entries. Add additional accounts as needed.
2. Determine the balances of the accounts affected by the adjusting and correcting
entries and prepare an adjusted trial balance. Assume no additional investments
during the period.

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Asset Expected Life Computers Office Furniture Vehicle Building 1 year 5 years 10 years 25 years LRB Consulting Unadjusted Trial Balance December 31, 2014 Credit Debit Balances Balances Cash Accounts Receivable Prepaid Insurance Prepaid Auto Insurance Computers Accumulated Depreciation- Computers Office Furniture Accumulated Depreciation--Office Furniture Vehicle Accumulated Depreciation Vehicle Building Accumulated DepreciationBuilding Land Accounts Payable Lennox Bronson, Capital Lennox Bronson, Consulting Fees Other Income Salaries Expense Supplies Expense Utilities Expense 2,195 9,680 3,960 1,656 6,200 6,200 6,775 4,065 17,900 3,580 216,000 12,960 119,000 1,126 247,639 Withdrawals 16,000 303.945 18,000 187,350 3,750 7,049 597,515 597,515