Question: LRB Consulting owned by Lennox Bronson has a December 31

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.
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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  • CreatedSeptember 15, 2015
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