a. Prepare the adjusting journal entries required for the following transactions of a company, assuming...
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a. Prepare the adjusting journal entries required for the following transactions of a company, assuming accounting period ends on Dec 31. (no explanation required). (6 marks)
i. A customer paid in advance $5,400 on July 1 for services to be provided over the next 8 months. ii. On Oct 1, a note receivable was received from a customer. The note was for $4,000, one year, and had an interest at 12%. The interest is to be received at the maturity date of the note. iii. Record depreciation of machinery. Cost of $99,000, residual value $3,000, 8 year life, straight-line method.
b. Briefly explain how the income statement relates to the statement of changes in equity; and the statement of changes in equity relates to the statement of financial position. (4 marks)
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