Crimson Tide Music Academy offers lessons in playing a wide range of musical ins
ID: 2605289 • Letter: C
Question
Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2018, appears below. December 31 is the company's fiscal year-end.
Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation of equipment for the year is $6,000.
b. Accrued salaries at year-end should be $2,100.
c. Crimson Tide borrows $20,000 on September 1, 2018. The principal is due to be repaid in four years. Interest is payable each August 31 at an annual rate of 12%.
d. Unused supplies at year-end total $700. Crimson Tide debits Supplies at the time supplies are purchased.
e. Crimson Tide opens a second studio by paying for one year of rent in advance on April 1, 2018, for $7,200 ($600 per month) debiting Prepaid Rent.
f. Unpaid utilities for December total $200.
Question: Record closing entries.
Journal entry worksheet
Record the entry to close the revenue accounts.
Note: Enter debits before credits.
Accounts Debits Credits Cash $ 10,300 Accounts Receivable 9,500 Supplies 2,000 Prepaid Rent 7,200 Equipment 90,000 Accumulated Depreciation $ 12,000 Accounts Payable 7,700 Salaries Payable 0 Interest Payable 0 Utilities Payable 0 Notes Payable 20,000 Common Stock 45,000 Retained Earnings 19,000 Service Revenue 42,200 Salaries Expense 24,500 Interest Expense 0 Rent Expense 0 Supplies Expense 0 Utilities Expense 2,400 Depreciation Expense 0 Totals $ 145,900 $ 145,900Explanation / Answer
journal entries
adjusted trial balance
date
explanation
debit
credit
Accounts
Debits
Credits
31-Dec
depreciation expense
6000
Cash
$
10,300
accumulated depreciation-equipment
6000
Accounts Receivable
9,500
Supplies
700
31-Dec
salaries expense
2100
Prepaid Rent
1,800
Salaries Payable
2100
Equipment
90,000
Accumulated Depreciation
$
18,000
31-Dec
interest expense
800
Accounts Payable
7,700
interest payable
800
Salaries Payable
2100
Interest Payable
800
31-Dec
supplies expense
1300
Utilities Payable
200
supplies
1300
Notes Payable
20,000
Common Stock
45,000
31-Dec
rent expense
5400
Retained Earnings
19,000
prepaid rent
5400
Service Revenue
42,200
Salaries Expense
26,600
31-Dec
utilities expense
200
Interest Expense
800
utilities expense payable
200
Rent Expense
5400
Supplies Expense
1300
closing entries
Utilities Expense
2,600
31-Dec
Service Revenue
42,200
Depreciation Expense
6000
income summary
42,200
Totals
$
155,000
$
155,000
31-Dec
income summary
42,700
Salaries Expense
26,600
Interest Expense
800
Rent Expense
5400
Supplies Expense
1300
Utilities Expense
2,600
Depreciation Expense
6000
31-Dec
retained earning
500
income summary
500
journal entries
adjusted trial balance
date
explanation
debit
credit
Accounts
Debits
Credits
31-Dec
depreciation expense
6000
Cash
$
10,300
accumulated depreciation-equipment
6000
Accounts Receivable
9,500
Supplies
700
31-Dec
salaries expense
2100
Prepaid Rent
1,800
Salaries Payable
2100
Equipment
90,000
Accumulated Depreciation
$
18,000
31-Dec
interest expense
800
Accounts Payable
7,700
interest payable
800
Salaries Payable
2100
Interest Payable
800
31-Dec
supplies expense
1300
Utilities Payable
200
supplies
1300
Notes Payable
20,000
Common Stock
45,000
31-Dec
rent expense
5400
Retained Earnings
19,000
prepaid rent
5400
Service Revenue
42,200
Salaries Expense
26,600
31-Dec
utilities expense
200
Interest Expense
800
utilities expense payable
200
Rent Expense
5400
Supplies Expense
1300
closing entries
Utilities Expense
2,600
31-Dec
Service Revenue
42,200
Depreciation Expense
6000
income summary
42,200
Totals
$
155,000
$
155,000
31-Dec
income summary
42,700
Salaries Expense
26,600
Interest Expense
800
Rent Expense
5400
Supplies Expense
1300
Utilities Expense
2,600
Depreciation Expense
6000
31-Dec
retained earning
500
income summary
500
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