Question

For each separate case below, follow the three-step process for adjusting the accrued revenue account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year.

a. Accounts Receivable. At year-end, the L. Cole Company has completed services of $19,000 for a client, but the client has not yet been billed for those services.
b. Interest Receivable. At year-end, the company has earned, but not yet recorded, $390 of interest earned from its investments in government bonds.
c. Accounts Receivable. A painting company bills customers when jobs are complete. The work for one job is now complete. The customer has not yet been billed for the $1,300 of work.

Answer 1

Answer:

Dr Accounts receivable $19,000

Cr Earned service revenues $19,000

Dr Interest receivable $390)

Cr Interest revenue $390

Dr Accounts receivable $1,300

Cr Earned service revenue $1,300

Explanation:

Preparation to Record the December 31 adjusting entry

Dr Accounts receivable $19,000

Cr Earned service revenues $19,000

Dr Interest receivable $390)

Cr Interest revenue $390

Dr Accounts receivable $1,300

Cr Earned service revenue $1,300