Question - Lau Ltd had the following transactions in the last two months of its year ended 31 December 2016.
1 November - Paid $1,500 cash for newspaper advertising for the next six months
1 November - Paid $2,160 cash for 12 months of insurance through to 31 October 2017.
30 November - Rec0eived $3,300 cash for future services to be provided to a customer.
1 December - Paid $2,700 cash for a consultant's services to be received over the next three months
15 December - Received $7,650 cash for figure services to be provided to a customer
31 December - Of the advertising paid for on 1 November, $900 worth is not yet used.
31 December - A portion of the insurance paid for on 1 November has expired. No adjustment has yet been made for this.
31 December - Services worth 51,200 are not yet provided to the customer who paid on 30 November.
31 December - One-third of the consulting services paid for on 1 December have been received.
31 December - The company has performed $3,000 of the services that the customer paid for on 15 December.
Required:
a. Prepare journal entries the transactions made from I November to 15 December 2016 using the method that records prepaid expenses as assets and records unearned revenues as liabilities.
b. Prepare adjusting journal entries on 31 December 2016.
Narratives are required for all journal entries.