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Service Pro Corp (SPC) is preparing adjustments for its September 30 year- end. For the following transactions and events, show the September 30 adjusting entries that SPC would make.
a. Prepaid Insurance shows a balance of zero at September 30, but Insurance Expense shows a debit balance of $ 2,340, representing the cost of a three- year fire insurance policy that was purchased on September 1 of the current year.
b. On August 31 of this year, Cash was debited and Service Revenue was credited for $ 1,500. The $ 1,500 related to fees for a three- month period beginning September 1 of the current year.
c. The company's income tax rate is 20%. After making the above adjustments, SPC's net income before tax is $ 10,000. No income tax has been paid or recorded.
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