The unadjusted trial balance of Turbo IT Services at December 31, 2025, and the data needed for the adjustments follow.

Adjustment data at December 31 follow: 

a. On December 15, Turbo IT Services contracted to perform services for a client, receiving $2,000 in advance. Turbo IT Services recorded this receipt of cash as Unearned Revenue. As of December 31, Turbo IT Services has completed $1,800 of the services.

b. Turbo IT Services prepaid two months of rent on December 1. (Assume the Prepaid Rent balance as shown on the unadjusted trial balance represents the two months of rent prepaid on December 1.) 

c. Turbo IT Services used $400 of supplies during the month. 

d. Depreciation for the equipment is $700. 

e. Turbo IT Services received a bill for December’s online advertising, $400. Turbo IT Services will not pay the bill until January. (Use Accounts Payable.) 

f. Turbo IT Services pays its employees weekly on Monday for the previous week’s salaries. Its employees earn $2,000 for a five-day workweek. December 31 falls on Wednesday this year.

g. On October 1, Turbo IT Services agreed to provide four-months of IT services (beginning October 1) for a customer for $2,040. Turbo IT Services has completed the services every month, but payment has not yet been received and no entries have been made. 

Requirements 

1. Journalize the adjusting entries on December 31. 

2. Using the unadjusted trial balance, open the T-accounts with the unadjusted balances. Post the adjusting entries to the T-accounts. 

3. Prepare the adjusted trial balance. 

4. How will Turbo IT Services use the adjusted trial balance?

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TURBO IT SERVICES Unadjusted Trial Balance December 31, 2025 Account Title Cash Accounts Receivable Prepaid Rent Supplies Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Unearned Revenue Common Stock Dividends Service Revenue Salaries Expense Rent Expense Depreciation Expense-Equipment Advertising Expense Supplies Expense Total Balance Debit $ 7,200 19,400 2,200 1,600 20,000 9,600 3,300 1,300 Credit $ 3,700 3,400 2,600 39,000 15,900 $ 64,600 $ 64,600