Several transactions for Trolley, Inc. are presented below. The company adjusts its books only at year-end.a.On August 1, the company rented some land from another company for $2,660 for a three-year time period. Trolley charged an expense account on August 1.b.On February 1, Trolley paid $9,600 for a four-year technical service contract. Trolley will receive services evenly throughout the four-year period. The company debited the asset account, Prepaid Service Contract, on February 1.c.On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note.d.The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday. Required: Prepare adjusting entries for December 31.

The adjusting journal entry refers to the entry which is recorded at the end of the accounting year…

Answered: Several transactions for Trolley, Inc.…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter11: Work Sheet And Adjusting Entries

Section: Chapter Questions

Problem 2E: On October 31, the Vermillion Igloos Hockey Club received 800,000 in cash in advance for season...

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Several transactions for Trolley, Inc. are presented below. The company adjusts its books only at year-end.

a.	On August 1, the company rented some land from another company for $2,660 for a three-year time period. Trolley charged an expense account on August 1.
b.	On February 1, Trolley paid $9,600 for a four-year technical service contract. Trolley will receive services evenly throughout the four-year period. The company debited the asset account, Prepaid Service Contract, on February 1.
c.	On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note.
d.	The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday.

Required:

Prepare adjusting entries for December 31.

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