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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, 2017, 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, 2017, follow.
  
Additional Information Items

1. An analysis of WTI's insurance policies shows that $3,732 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,235 are available at year-end 2017.
3. Annual depreciation on the equipment is $14,929.
4. Annual depreciation on the professional library is $7,464.
5. 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 $2,900, 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 2018.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,440 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.)
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2017
	Debit			Credit
Cash	$	26,944
Accounts receivable		0
Teaching supplies		10,362
Prepaid insurance		15,545
Prepaid rent		2,073
Professional library		31,088
Accumulated depreciation—Professional library				$	9,328
Equipment		72,533
Accumulated depreciation—Equipment					16,582
Accounts payable					34,202
Salaries payable					0
Unearned training fees					14,500
Common stock					14,000
Retained earnings					51,908
Dividends		41,452
Tuition fees earned					105,701
Training fees earned					39,379
Depreciation expense—Professional library		0
Depreciation expense—Equipment		0
Salaries expense		49,743
Insurance expense		0
Rent expense		22,803
Teaching supplies expense		0
Advertising expense		7,254
Utilities expense		5,803
Totals	$	285,600		$	285,600

Required:
1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.
  

Journal entry worksheet

Note: Enter debits before credits.

1. An analysis of WTI's insurance policies shows that $3,732 of coverage has expired.

2. An inventory count shows that teaching supplies costing $3,235 are available at year-end 2017.

3. Annual depreciation on the equipment is $14,929.

4. Annual depreciation on the professional library is $7,464.

5. 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 $2,900, 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 2018.

6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,440 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.)

7. 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.

8. The balance in the Prepaid Rent account represents rent for December.

	Transaction General Journal Debit Credit a.

Answer 1

Adjusting entries:

Transaction	General Journal	Debit	Credit
a	Insurance expense	$3,732
	Prepaid insurance		$3,732
	[To record insurance expense]
b	Teaching Supplies expense [10,362-3,235]	$7,127
	Teaching Supplies		$7,127
	[To record supplies expense]
c	Depreciation expense-Equipment	$14,929
	Accumulated depreciation-Equipment		$14,929
	[To record depreciation expense on equipment]
d	Depreciation expense-professional library	$7,464
	Accumulated depreciation-professional library		$7,464
	[To record depreciation expense on professional library]
e	Unearned training fees	$5,800
	Training fees [$2,900 x 2 months]		$5,800
	[To record fees earned from unearned]
f	Accounts receivable	$11,100
	Tuition fees earned [4,440 x 2.5 months]		$11,100
	[To record accrued tuition fees earned]
g	Salaries expense [$100 x 2 days x 2 employees]	$400
	Salaries payable		$400
	[To record accrued salaries]
h	Rent Expense	$2,073
	Prepaid rent		$2,073
	[To record rent expense]