On July 1,2010, Shawn Smith established his own accounting practice. Selected transactions for the first few days of July follow.
Instruction
1. Record the transactions on page 1 of the general journal. Omit descriptions. Assume that the firm initially records prepaid expenses as assets and unearned income as a liability.
2. Record the adjusting journal entries that must be made on July 31, 2010, on page 2 of the general journal. Omit descriptions.

Analyze: What balance should be reflected in Unearned Accounting Fees at July 31, 2010?

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DATE TRANSACTIONS July Signed a lease for an office and issued Check 101 for $13,200 to pay the rent in 1 advance for six months Borrowed money from First National Bank by issuing a four-month, 12 percent note for $24,000; received $23,040 because the bank deducted the interest in advance Signed an agreement with Young Corp. to provide accounting and tax services for one year at $6,000 per month; received the entire fee of $72,000 in advance. Purchased office equipment for $17,000 from Office Outfitters; issued a two-month, 12 percent note in payment. The equipment is estimated to have a useful life of six years and a $1,160 salvage value. The equipment will be depreciated using the straight-ine method. Purchased a one-year insurance policy and issued Check 102 for $1,620 to pay the entire premium. Purchased office furniture for $16,600 from Office Warehouse; issued Check 103 for $8,400 and agreed to pay the balance in 60 days. The equipment has an estimated useful life of five years and a $1,000 salvage value. The office furniture will be depreciated using the straight-line method. Purchased office supplies for $1,810 with Check 104. Assume $800 of supplies are on hand July 31, 2010