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Applying the time-period concept
Consider the following situations:
a. Business receives $2,000 on January 1 for 10-month service contract for the period January 1 through October 31.
b. Total salary for all employees is $3,000 per month. Employees are paid on the 1st and 15th of the month.
c. Work performed but not yet billed to customers for the month is $900.
d. The company pays interest on its $10,000, 6% note payable of $50 on the first day of each month.
Requirement
1. Assume the company records adjusting entries monthly. Calculate the amount of each adjustment needed, if any, as of February 28.
Financial Statement Analysis and Preparation
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