Refer to the information in E3-31. Prepare adjusting journal entries for each transaction. Set up T-accounts for each of the ledger accounts and post the journal entries to them.

Q3-31

T. Lys began Thomas Refinishing Service on July 1. Selected accounts are shown below as of July 31, before any accounting adjustments have been made.

Using the following information, prepare the accounting adjustments necessary on July 31 using the financial statement effects template.

a. On July 1, the firm paid one year's rent of \(\$ 6,900\) in cash.

b. On July 1, $ 630 cash was paid to the local newspaper for an advertisement to run daily for the months of July, August, and September.

c. Supplies still available at July 31 total $ 1,100.

d. At July 31, refinishing services of $ 800 have been performed but not yet recorded or billed to customers. The firm uses the account Fees Receivable to reflect amounts due but not yet billed.

e. In early July, a customer paid \(\$ 600\) in advance for a refinishing project. At July 31 , the project is one-half complete.

Transcribed Image Text:

Prepaid Rent..... Prepaid Advertising Supplies .... Unearned Refinishing Fees Refinishing Fees Revenue .... Debits $6,900 630 3,000 2,500 Credits $ 600