Question

Required information 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 tuton directly to the school. WTI also offers training to groups in te locations. WTI nally records prepaid expenses and unearned revenues in balance sheet accounts. Its unad usted trial balance as o December 31 follows along with descriptions of items a through that require adjusting entries on December 31 Additional Information Items a. An analysis of WT's Insurance policies shows that $3.500 of coverage has expired b. An Inventory count shows that teaching supples costing $3.120 are available at year-end. C. Annual depreciation on the equipment is $14,400. d. Annual depreciation on the professional librarys $7.200. e. On September 1, WTI agreed to do five courses for a client for $2.500 each. Two courses w start mediately and finish before the end of the year, Three Courses will not begin unt next year. The client paid $12.500 cash in advance for all five courses on September 1, and WTI credited Uneamed Training Fees f. On October 15, WTI agreed to teach a four- month class beginning Immediately or an execut ve with payment due at the end of the class. At December 31, $11,450 of the tuition has been earned by WTL 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 Credit $ 9,171 16,303 27,000 WELLS TECHNICAL INSTITURE Unadjusted Trial Balance December 31 Debit Call $ 26,491 Accounts receivable Teaching supplies 10, 187 Prepaid insurance 15,284 Prepaid rent 2,039 Professional library 30,565 Accumulated depreciation Professional Library Equipment 99,000 Accumulated depreciation Equipment Accounts payable Salaries payable Unearned training fees Common stock Retained earnings Dividends 40,755 Tuition fees earned Training fees earned Depreciation expense Professional Library Depreciation expense Equipment Salaries expense 48,907 Insurance expense Rent expense 22,429 Teaching supplies expense Advertising expense 7. 122 Utilities expense 5.706 Totals $308.495 12.500 23, 880 77.000 103,924 38,712 $308,495

Answer 1

The journal entries are recorded based on accounting rules in which all expenses, assets, losses are debited for increase and revenue, liabilities, equity, gain are credited for increase
Adjusting journal entries are reflected below
Transaction	General Journal	Debit	Credit
a.	Insurance expense	$3,600
	Prepaid insurance		$3,600
	(To record insurance expense)
b.	Teaching supplies expense (10,187-3,120)	$7,067
	Teaching supplies		$7,067
	(To record supplies expense)
c.	Depreciation expense - Equipment	$14,400
	Accumulated depreciation - Equipment		$14,400
	(To record depreciation on equipment)
d.	Depreciation expense - Professional library	$7,200
	Accumulated depreciation - Professional library		$7,200
	(To record depreciation on professional library)
e.	Unearned training fees (2*2500)	$5,000
	Training fees earned		$5,000
	(To record training fees earned)
f.	Accounts receivable	$11,450
	Tuition fees earned		$11,450
	(To record tuition fees earned)
g.	Salaries expense ($100*2*2)	$400
	Salaries expense payable		$400
	(To record salaries accrued)
h.	Rent expense	$2,039
	Prepaid rent		$2,039
	(To record rent expense)