The unadjusted trial balance of Newport Inn Company at December 31, 2016, and the data needed for the adjustments follow.
Adjustment data at December 31 follow:
As of December 31, Newport had $600 of Prepaid Insurance remaining.
At the end of the month, Newport had $700 of office supplies remaining.
Depreciation on the building is $3,500.
Newport pays its employees weekly on Friday. Its employees earn $1,500 for a five-day workweek. December 31 falls on Wednesday this year.
On November 20, Newport contracted to perform services for a client receiving $2,500 in advance. Newport recorded this receipt of cash as Unearned Revenue. As of December 31, Newport has $1,500 still unearned.
Requirements
1. Journalize the adjusting entries on December 31.
2. Using the unadjusted trial balance, open the accounts (use a four-column ledger) with the unadjusted balances. Post the adjusting entries to the ledger accounts.
3. Prepare the adjusted trial balance.4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly? Explain.