Question

Cathy Credit has a realty company and adjusts its books at July 31. Prepare the adjusting entries based on the following information:

1. Unbilled fees at July 31, $11,150
2. Supplies on the unadjusted trial balance are $3,350. A count of supplies at the end of July indicates that $900 of supplies remains.
3. Rent expired $6,000
4. Depreciation on equipment $8,950
5. Unearned fees on the unadjusted trial balance are $12,000. Unearned fees at July 31 are $2,000
6. Wages accrued but not paid at July 31, $4,840

Answer 1

Adjusting entries.

Date	Accounts	Debit	Credit
A	Unbilled accounts receivable	$ 11,150
	To Service revenue		$ 11,150
B	Supplies expense	$ 2,450
	To supplies		$ 2,450
C	Rent expense	$ 6,000
	Prepaid rent		$ 6,000
D	Depreciation - equipment	$ 8,950
	To Accumulated Depreciation		$ 8,950
E	Unearned fees	$ 10,000
	To fees earned/revenue		$ 10,000
F	Wages expense	$ 4,840
	To wages payable		$ 4,840

SUMMARY:

The first transaction says that bill is Unbilled. So debit to Unbilled accounts receivable made. When bill is billed, then debit accounts receivable and credit Unbilled accounts receivable.