Reference no: EM132619610

Question - Frost Corp. has reported pre-tax income of $250,000 for calendar 2019, before considering the five items below.

Prepare the adjusting entries needed at December 31, 2019 in order to correctly state the 2019 pre-tax income. If no entry is needed, write NONE.

1. Interest on a $42,000, 7%, six- year note payable was last paid on September 1, 2019.

2. On May 31, 2019, Frost entered into a contract to provide services to a customer for eighteen months beginning June 1. The customer paid the $18,000 fee in full on June 1 and Frost credited it to Service Revenue at that time.

3. On August 1, 2019, Frost paid a year's rent in advance on a warehouse, and debited the $48,000 payment to Prepaid Rent.

4. Depreciation on office equipment for 2019 is $ 17,000.

5. On December 18, 2019, Frost paid the local newspaper $1,000 for an advertisement to be run in January of 2020, debiting it to Prepaid Advertising.