Question: Journalizing and posting adjustments to the four-column accounts and preparing an adjusted trial balance The unadjusted trial balance of Lexington Inn Company at December 31, 2016, and the data needed for the adjustments follow.
Adjustment data at December 31 follow:
a. As of December 31, Lexington had $600 of Prepaid Insurance remaining.
b. At the end of the month, Lexington had $700 of office supplies remaining.
c. Depreciation on the building is $3,500.
d. Lexington pays its employees weekly on Friday. Its employees earn $1,500 for a five-day workweek. December 31 falls on Wednesday this year.
e. On November 20, Lexington contracted to perform services for a client receiving $2,500 in advance. Lexington recorded this receipt of cash as Unearned Revenue. As of December 31, Lexington has $1,500 still unearned.
Requirements: 1. Journalize the adjusting entries on December 31.
2. The four-column ledger accounts have been opened for you using the unadjusted trial balance adjusting entries to the ledger accounts.
3. Prepare the adjusted trial balance.
4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that entries have been recorded correctly? Explain.