The following selected accounts appear in Shaw Company's unadjusted trial balance at December 31, 2018, the end of its fiscal year (all accounts have normal balances).

REQUIRED:

a. Prepare its adjusting entries at December 31, 2018. (1) using the financial statement effects template. and (2) in journal entry form using the following additional information.

1. Prepaid advertising at December 31 is $800.

2. Unpaid and unrecorded wages earned by employees in December are$ 1,300.

3. Prepaid insurance at December 31 is $2,280.

4. Perfom1ance obligations represent service fees collected in advance of when the services are provided to customers. Performance obligations at December 31 are $3,000.

5. Rent revenue of$ 1,000 owed by a tenant is not recorded at December 31.

b. Prepare entries on January 4, 2019, using the financial statement effects template and in journal entry form, 10 record. (1) Payment of $2,400 cash in wages. which includes the $1,300 accrued at December 31. (2) Cash receipt of the $1,000 rent revenue owed from the tenant.

Transcribed Image Text:

Prepaid adverlising. .. Wages expense.. Prepaid insurance. Performance obligations.. Service fees revenue. $ 1,200 $ 5,400 ... ... ... ... ... 43,800 87,000 .... . ... .. 3,420 Rental income... 4,900