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Case-ben cartwright pest control

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Reference no: EM133041256

Ben Cartwright Pest Control has the following balances in selected accounts on December 31, 2020.

Notes Payable                                                     120,000

Prepaid Insurance                                               4,800

Supplies                                                             2,400

Equipment                                                          220,000                          

Unearned Service Revenue                                  27,000

All of the accounts have normal balances. The information below has been gathered at December 31, 2020.

Instructions: Prepare the adjusting entries at the end of 2020 for the items listed below.

1. Ben Cartwright Pest Control borrowed $120,000 by signing a 3%, one-year note on August 1, 2020.

2. Ben Cartwright Pest Control paid $4,800 for 12 months of insurance coverage on September 1, 2020.

3. On October 1, Ben Cartwright Pest Control purchased equipment for $220,000. The straight-line depreciation method is used with estimated useful life of 5 years and residual value of $20,000.

4. On November 1, 2020, Ben Cartwright Pest Control collected $27,000 for disinfecting processes to be performed from November 1, 2020, through April 30, 2021.

Reference no: EM133041256

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