, Adjusting Entries The Wheel Place, Inc., began operations on March 1 to provid

Question

, Adjusting Entries The Wheel Place, Inc., began operations on March 1 to provide automotive wheel LO alig nment and balancing services. On March 31, 2015, the unadjusted balances of the firm's accounts are as follows THE WHEEL PLACE, INC Unadjusted Trial Balance March 31, 2015 Debit Credit S 1,900 5,820 Prepaid rent Supplies .4,770 3,700 4,510 1,500 38,400 12,360 Unearned service revenue Service revenue.. . Wages expense . The following information is also available. 1. The balance in Prepaid Rent was the amount paid on March 1 to cover the first six months' rent. 2. Supplies on hand on March 31 amounted to $1,920 3. The equipment has an estimated life of nine years 4. Unpaid wages at March 31 were $660. 5. Utility services used during March were estimated at $590. A bill is expect ed early in April 6. The balance in Unearned Service Revenue was the amount received on March 1 from a new car dealer to cover alignment and balancing services on all new cars sold by the dealer in March and April. The Wheel Place agreed to provide the services at a fixed fee of $750 each month. Requirea Prepare the adjusting entries needed at March 31 in general journal form.

Explanation / Answer

Adjusting entries Debit Credit 1 Rent expense 795 (4770*1/6)                 Prepaid rent 795 2 Supplies expense 1780              Supplies 1780 3 Depreciation expense 335 (36180/9*1/12)           Accumulated depreciation equipment 335 4 Wages expense 660            Wages payable 660 5 Utilities expense 590            Utilities payable 590

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