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Terry Thomas opens the Green Thumb Lawn Care Company on April 1.At April 30, the trial balance shows the following balances for selected accounts.
Prepaid Insurance
$ 3,600
Equipment
28,000
Notes Payable
20,000
Unearned Revenue
4,200
Service Revenue
1,800
Analysis reveals the following additional data.
1. Prepaid insurance is the cost of a 2-year insurance policy, effective April 1.
2. Depreciation on the equipment is $500 per month.
3. The note payable is dated April 1. It is a 6-month, 12% note.
4. Seven customers paid for the company's 6 months' lawn service package of $600 beginning in April. The company performed services for these customers in April.
5. Lawn services provided other customers but not recorded at April 30 totaled $1,500.
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