Question

[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. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31 Additional Information Items a. An analysis of WTi's insurance policies shows that $3,600 of coverage has expired. b. An inventory count shows that teaching supplies costing $3.120 are available at year-end. c. Annual depreciation on the equipment is $14,400. d. Annual depreciation on the professional library is $7.200. e. On September 1, WTI agreed to do five courses for a client for $2.400 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $12,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $11,700 of the tuition has been earned by WTI. 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
a	Insurance expense	3600
	Prepaid insurance		3600
b	Teaching supplies expense	7474
	Teaching supplies (10594-3120)		7474
c	Depreciation expense	14400
	Accumulated depreciation-equipment		14400
d	Depreciation expense	7200
	Accumulated depreciation-Professional library		7200
e	Unearned training fees	4800
	Training fees earned		4800
f	Account receivable	11700
	Tuition fees earned		11700
g	Wages expense (100*2*2)	400
	Wages payable		400
h	Rent expense	2120
	Prepaid rent		2120