Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2018, appears below. December 31 is the company's fiscal year-end.
Accounts Debits Credits
Cash $ 9,400
Accounts Receivable 8,600
Supplies 1,550
Prepaid Rent 6,120
Equipment 76,500
Accumulated Depreciation $ 10,200
Accounts Payable 6,800
Salaries Payable 0
Interest Payable 0
Utilities Payable 0
Notes Payable 15,500
Common Stock 36,000
Retained Earnings 14,500
Service Revenue 44,720
Salaries Expense 23,600
Interest Expense 0
Rent Expense 0
Supplies Expense 0
Utilities Expense 1,950
Depreciation Expense 0
Totals $ 127,720 $ 127,720
Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation of equipment for the year is $5,100.
b. Accrued salaries at year-end should be $1,650.
c. Crimson Tide borrows $15,500 on September 1, 2018. The principal is due to be repaid in four years. Interest is payable each August 31 at an annual rate of 12%.
d. Unused supplies at year-end total $610. Crimson Tide debits Supplies at the time supplies are purchased.
e. Crimson Tide opens a second studio by paying for one year of rent in advance on April 1, 2018, for $6,120 ($510 per month) debiting Prepaid Rent.
f. Unpaid utilities for December total $200.
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