The following selected accounts appear in the Birch Company's unadjusted trial balance as of December 31, the
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Question:
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):
Prepaid Maintenance | $4,400 | Commission Fees Earned | $85,700 | |
Supplies | 10,000 | Rent Expense | 12,500 | |
Unearned Commission Fees | 10,200 |
Required
Prepare the necessary adjusting entries in the general journal as of December 31, assuming the following:
- On September 1, the company entered into a prepaid equipment maintenance contract. Birch Company paid $3,400 to cover maintenance service for six months, beginning September 1. The payment was debited to Prepaid Maintenance.
- Supplies on hand at December 31 are $3,900.
- Unearned commission fees at December 31 are $7,000.
- Commission fees earned but not yet billed at December 31 are $3,500.
(Note: Debit Fees Receivable.) - Birch Company's lease calls for rent of $1,600 per month payable on the first of each month, plus an annual amount equal to 1% of annual commissions earned. This additional rent is payable on January 10 of the following year.
(Note: Be sure to use the adjusted amount of commissions earned in computing the additional rent.)
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