Question: Recording Adjusting Journal Entries Greenly Company's annual accounting year ends on June 30. It is June 30, 2010, and all of the 2010 entries except the following adjusting journal entries have been made:
a. The company earned service revenue of $2,000 on a special job that was completed June 29, 2010. Collection will be made during July 2010; no entry has been recorded.
b. On March 30, 2010, Greenly paid a $3,200, six-month premium for property insurance for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
c. At June 30, 2010, wages of $900 earned by employees were not yet paid. The employees will be paid on the next payroll date, July 15, 2010.
d. On June 1, 2010, Greenly collected two months' maintenance revenue of $450. At that date, Greenly debited Cash and credited Unearned Maintenance Revenue for $450.
e. Depreciation of $1,500 must be recognized on a service truck purchased on July 1, 2007.
f. Cash of $4,200 was collected on May 1, 2010, for services to be rendered evenly over the next year beginning on May 1. Unearned Service Revenue was credited when the cash was received.
g. The company owes $600 interest on a bank loan taken out on February 1, 2010. The interest will be paid when the loan is repaid on January 31, 2011.
Required: Following the steps outlined in the chapter, for each transaction:
1. Identify the type of adjustment (unearned revenue, accrued revenue, prepaid expense, or accrued expense).
2. Determine the amount of revenue or expense to be recorded.
3. Record the adjusting journal entry at June 30, 2010.