Understanding Bookkeeping

The following is the unadjusted accounts of ABC Co as at 31 December 2006 :

Additional information:

1. Rent expense is $500 per month. Rent expense for the month of December is still unpaid
2. The company received $12,000 at the early month of December for services performed until end of May 2007. The charge rate for the services is equally distributed among those months
3. Prepaid insurance represented one year premiums purchased April 1, 2006
4. Fee earned but unbilled on Dec 31 are $4,250
5. Supplies on hand at December 31 are $1,750
6. Depreciation of equipment is based on straight line method. The equipment has 10 years estimated life with no scrap value

Required:

1. Journalize the adjusting entries at 31 December 2006
2. Prepare an adjusted trial balance as at 31 December 2006

The following is the unadjusted accounts of ABC Co as at 31 December 2006 :

All the accounts’ balances are checked at the end of the accounting period and the following items are found to be omitted:-

1. supplies on hand at 31 Dec amounted to $2,350
2. prepaid insurance represented premiums purchased on 1 April 2006 for a period of one year
3. depreciation of office equipment based on the straight-line method. The office equipment has a 8 year estimated life with no scrap value
4. utilities expenses amount to $2,680
5. salaries expense for the month of Dec is $1,500 and only be paid early next year
6. unearned revenue on 31 Dec is $21,250

Question:

(1) Prepare the adjusting journal entries

(2) Prepare an adjusted trial balance as at 31 December 2006