Question

Required information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3 The following information applies to the questions displayed below.] Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2018, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2018, follow. Additional Information Items . An analysis of WTi's Insurance policies shows that $3,468 of coverage has expired. b. An inventory count shows that teaching supplies costing $3,006 are available at year-end 2018 c. Annual depreciation on the equipment is $13.871. d. Annual depreciation on the professional library is $6,936. e. On November 1. WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,800, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2019. f. On October 15, WTI agreed to teach a four-month class (beginning immediately for an individual for $4.019 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. ( WTI's accruals are applied to the nearest half-month, for example. October recognizes one-half month accrual.) g. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December

Answer 1

Adjusting entry

No	General journal	Debit	Credit
1	Insurance expense	3468
	Prepaid insurance (		3468
2	Teaching supplies expense (10768-3006)	7762
	Teaching supplies		7762
3	Depreciation expense	13871
	Accumulated depreciation-equipment		13871
4	Depreciation expense	6936
	Accumulated depreciation-professional library		6936
5	Unearned training fees (2800*2)	5600
	Training fees earned		5600
6	Account receivable (4019*2.5)	10047.50
	Tuition fees earned		10047.50
7	Salaries expense (100*2*2)	400
	Salaries payable		400
8	Rent expense	2155
	Prepaid rent		2155