# Adjusting Entries The following selected accounts appear in the Birch Company's unadjusted trial balance as of December

## Question:

Adjusting Entries The following selected accounts appear in the Birch Company's unadjusted trial balance as of December 31, the end of the fiscal year (all accounts have normal balances):

Required

Prepare the necessary adjusting entries in the general journal as of December 31, assuming the following:

1. On September 1, the company entered into a prepaid equipment maintenance contract. Birch Company paid $$\ 2,700$$ to cover maintenance service for six months, beginning September 1. The $$\ 2,700$$ payment was debited to Prepaid Maintenance.

2. Supplies on hand at December 31 are $$\ 2,900$$.

3. Unearned commission fees at December 31 are $$\ 4,000$$.

4. Commission fees earned but not yet billed at December 31 are $$\ 3,500$$. (Note; Debit Fees Receivable.)

5. Birch Company's lease calls for rent of $$\ 900$$ per month payable on the first of each month, plus an annual amount equal to 2 percent of annual commissions earned. This additional rent is payable on January 10 of the following year. Be sure to use the adjusted amount of commissions earned in computing the additional rent.

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