Introduction to Accounting An Integrated Approach Eighth Edition Chapter 7 E7.9

For each of the following situations, prepare the adjusting entry for the month ended October 31 and indicate the effect each adjustment would have on net income: A. Wingenbach Plumbing had a $35,000 contract with a construction company to perform plumbing services for a home under construction. Payment was to be received at the end of the job. As of October 31,$8,000 worth of services had been performed. B. Hutchison State Bank made a $10,000 loan to a customer on October 1. The terms called for principal and interest of 8 percent to be paid at the end of one year. Hutchison State Bank prepares monthly financial statements. C. Davis, Inc., a real estate company, rents office space to a lawyer for $1,200 per month. The invoice for October had not been sent as of October 31