you have been retained to examine the records of mary s day care center as of decemb 501553

You have been retained to examine the records of Mary s Day Care Center as of December 31, 20X3, the close of the current reporting period. In the course of your examination, you discover the following:

On January 1, 20X3, the Supplies account had a balance of $1,350. During the year, $5,520 worth of supplies was purchased, and a balance of $1,620 remained unused on December 31.

Unrecorded interest owed to the center totaled $275 as of December 31.

All clients pay tuition in advance, and their payments are credited to the Unearned Tuition Revenue account. The account was credited for $65,500 on August 31. With the exception of $15,500 all amounts were for the current semester ending on December 31.

Depreciation on the school s van was $3,000 for the year.

On August 1, the center began to pay rent in 6-month installments of $24,000. Mary wrote a check to the owner of the building and recorded the check in Prepaid Rent, a new account.

Two salaried employees earn $400 each for a 5-day week. The employees are paid every Friday, and December 31 falls on a Thursday.

Mary s Day Care paid insurance premiums as follows, each time debiting Prepaid Insurance:

Date Paid Policy No. Length of Policy Amount

Feb. 1, 20X2 1033MCM19 1 year $540

Jan. 1, 20X3 7952789HP 1 year 912

Aug. 1, 20X3 XQ943675ST 2 years 840

Instructions:

The center s accounts were last adjusted on December 31, 20X2. Prepare the adjusting entries necessary under the accrual basis of accounting.