Hart Corporation encounters the following situations:

Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2015.

1. Hart collects $1,300 from a customer in 2015 for services to be performed in 2016.

2. Hart incurs utility expense which is not yet paid in cash or recorded.

3. Hart's employees worked 3 days in 2015 but will not be paid until 2016.

4. Hart performs services for customers but has not yet received cash or recorded the transaction.

5. Hart paid $2,400 rent on December 1 for the 4 months starting December 1.

6. Hart received cash for future services and recorded a liability until the service was performed.

7. Hart performed consulting services for a client in December 2015. On December 31, it had not billed the client for services performed of $1,200.

8. Hart paid cash for an expense and recorded an asset until the item was used up.

9. Hart purchased $900 of supplies in 2015; at year-end, $400 of supplies remain unused.

10. Hart purchased equipment on January 1, 2015; the equipment will be used for 5 years.

11. Hart borrowed $10,000 on October 1, 2015, signing an 8% one-year note payable.

Answer rating: 100% (QA)

Prepaid expense is expenses paid in advance Usually Insurance premium is paid before start of the relevant year It is required to cover the risk It is ... View the full answer