50.1K

Verified Solution

Link Copied!

No Spacing Heading QUESTION 3 (16 marks) Three Acadia science graduates started a university tutoring business called "Tom, Terry, & Tricia's Tutoring Inc." on July 1, 2019. Tricia agreed to help with the company's accounting because she had completed an accounting course in high school before attending Acadia. Tricia has recorded the day-to-day general Journal entries but needs your help with the following at December 31, 2019 (yearend): On July 1, 2019 the company purchased a computer for $4,000 and Tricia recorded the cost as computer equipment. The computer is expected to have a two year useful life with no residual value. Tricia selected the straight-line method for depreciation. She knows that the amount of depreciation for the six months ended December 31, 2019 is $1,000 but is not sure how to record the adjusting entry. Employee wages were last recorded when they were paid on December 27, 2019. Five employees worked December 28th to December 31" at a daily rate of $100 per employee. On July 1, 2019 the company paid rent of $6,000 to last a six month period. Tricia recorded the $6,000 as prepaid rent. The company borrowed $15,000 on July 1, 2019. The annual interest rate on the loan is 6%. The loan and the accrued interest are due on December 31, 2020. Terry provided a biology student with $300 of tutoring services in December 2019. The student will pay for the tutoring services in January when he receives his second term student loan. Tricia has not recorded this transaction. On January 6, 2020, the company received a bill from its internet provider for $750. The bill relates to internet services provided in 2019. REQUIRED: Prepare the adjusting journal entries for the year based on the additional information presented above

Answer & Explanation Solved by verified expert

See Answer