Adjusting the Accounts

Alena Co. was organized on July 1, 2019. quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown bellow
ALENA CO.
Trial Balance
September 30, 2019

Instructions

  1. Journalize the adjusting entries that were made
  2. Prepare an income statement and an owner's equity statement for the 3 months ending September 30 and a balance sheet at September 30.
  3. If the note bears interest at 12%, how many months has it been outstanding?

Answer

a.
ALENA CO.
Adjusting Journal Entries

 

b.
ALENA CO.
Income Statement
For the Quarter Ended September 30, 2019
ALENA CO.
Owner's Equity Statement
For the Quarter Ended September 30, 2019

ALENA CO.
Balance Sheet
September 30, 2019

 

c.

Interest rate 12% per year for notes. So that monthly interest for notes is $10,000 X (12%/12) = $100. Since total interest expense is $100, the note has been outstanding for 1 month

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