Check my work ll geological consulting firm of Gilbert, Marsh, & Kester prepares

Question

Check my work ll geological consulting firm of Gilbert, Marsh, & Kester prepares adjusting entries on a monthly basis. Among the items requiring adjustment on December 31, year 2, are the following 1. The company has outstanding a $66,000, 9 percent, 2-year note payable issued on July 1. year t. Pa plus all accrued interest for the 2-year loan period, is due in full on June 30, year 3 2. The firm is providing consulting services to Texas Oil Company at an agreed-upon rate of $1020 per day. At December 31, 10 days of unbilled consulting services have been provided a. Prepare the two adjusting entries required on December 31 to record the accrued interest expense and the accrued consulting revenue earned. b. Assume that the $66,000 note payable plus all accrued interest are paid in full on June 30, year 3. What portion of the total interest expense associated with this note will be reported in the firm's year 3 income statement? c. Assume that on January 30, year 3, Gilbert, Marsh, & Kester receive $25.000 from Texas Oil Company in full payment of the consulting services provided in December and January. What portion of this amount constitutes revenue earned in Ja Complete this question by entering your answers in the tabs below. Required A Required BE Required C Assume that the $66,000 note payable plus all accrued interest are paid in full on June 30, year 3. What portion of the total interest expense associated with this note will be reported in the firm's year 3 income statement? he total interest expense

Explanation / Answer

1). Adjusting Entries

b). Total Interest :
$66000 * 9% *1/2 = $2970

c). Total amount received $25000
Revenue earned in January = 25000 - 10200 (December revenue) = $14800

General Journal Debit Credit 1 Interest Expense $495    Interest Payable $495 2 Accounts Receivable $10200    Consulting Fees Earned $10200

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