Question

The CCBC Corporation had the following opening trial balance at the beginning of its fiscal year, July 1, 2018:

		Debit			Credit
Cash		$	7,700
Accounts receivable			6,600
Supplies			1,200
Equipment			13,800
Accumulated depreciation—equipment					$	5,500
Unearned revenue						2,750
Common shares						6,000
Retained earnings						15,050
Totals		$	29,300		$	29,300

During the month of July, the following selected transactions took place:

July 2		Paid $1,000 for two months’ rent in advance for July and August.
7		Purchased $200 of supplies on account.
14		Collected half of outstanding accounts receivable.
15		Borrowed $1,000 from the bank for one year at an interest rate of 5%.
21		Received $1,000 cash from a customer for services to be performed in August.
28		Performed $1,000 of services to a customer on account.

Additional information:

1.		At July 31, the company had performed $800 of services for a client that it had not billed or recorded.
2.		Refer to the July 2 transaction where rent was paid in advance and adjust, if required.
3.		Supplies on hand at July 31 were $500.
4.		The equipment has a five-year useful life and uses straight-line depreciation.
5.		Interest is due on the bank loan on the first day of each following month, beginning August 1.
6.		As at July 31, the company owed $2,500 of salaries to its employees for the month just ended.
7.		As at July 31, the company had earned $2,000 of revenue that had been paid in advance.

(b)

Prepare adjusting entries at July 31, assuming the company prepares adjusting entries monthly. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
July 31
	(To record adjusting entry for services provided but not billed)
July 31
	(To record adjusting entry for rent expense for the month paid in advance)
July 31
	(To record adjusting entry for supplies expense)
July 31
	(To record depreciation expense)
July 31
	(To record interest expense accrued but not paid)
July 31
	(To record salaries owed to employees)
July 31
	(To record revenue paid in advance)

Answer 1

Credit Debit 800 800 500 1 500 900 900 Date Account Titles and Explanation Jul-31 Accounts receivable Service revenue (To record adjusting entry for services provided but not billed) Jul-31 Rent expense Prepaid rent (1,000/2) (To record adjusting entry for rent expense for the month paid in advance) Jul-31 Supplies expense Supplies (1.200+200-500) (To record adjusting entry for supplies expense) Jul-31 Depreciation expense Accumulated depreciation (13,800/60 month) (To record depreciation expense) Jul-31 Interest expense Interest payable (1,000x(5%/12)x(16 days/31 days) (To record interest expense accrued but not paid) Jul-31 Salaries expenses Salaries payable (To record salaries owed to employees) Jul-31 Revenue Unearned revenue (To record revenue paid in advance) 230 2.500 2,500 2.000 2.000