Chen Financial Services (CFS) is making adjusting entries for the year ended June 30, 2013. The accounting clerk gathered the following information:
a. Paid one-year insurance premium of $2,400 on December 1, 2012, for coverage beginning on January 1, 2013.
b. Office Supplies account showed a balance of $480 and $270 on June 30, 2012 and 2013, respectively. During the year, CFS purchased $860 of office supplies.
c. Received $3,600 from a customer who paid for a three-month financial service contract starting on June 1. Financial Services Revenue account was credited on June 1.
d. An employee borrowed $12,000 by signing a one-year, 5% interest-bearing note from CFS on September 1. The note specified that interest was payable on the 5th of each month, starting October 2013.
e. Signed a contract on June 1 with a local advertising company for $1,500 monthly advertising fee. The advertising service started immediately after signing the contract, and the payment was to be made on the 2nd of each month, starting July 2013.
Requirements
1. Prepare the adjusting entry for each item (a) to (e).
2. What amount should be reported for revenue and expense accounts, from (a) to (e) on the income statement, for the year ended June 30, 2013?
3. What amount should be reported for each asset and liability account in the statement of financial position?