Reference no: EM132469946

Question – The ledger of Hammond Company, on August 31, 2017, includes these selected accounts before adjusting entries are prepared. (10M) Prepaid Insurance $3,600 – Supplies 2,800 – Unearned Service Revenue 9,200 An analysis of the accounts shows the following. – Insurance expires at the rate of $100 per month. – Supplies on hand total $800. – During March, services were performed for one-half of the unearned service revenue. – At August 31, the company owed its employees $800 in salaries and wages that will be paid on September 1. – On August 1, the company borrowed $30,000 from a local bank on a 15-year mortgage. The annual interest rate is 10%. – Revenue for services performed but unrecorded for August totaled $1,100.
Required – Prepare the adjusting entries for the month of March – Show the effect of adjustments on income statement and balance sheet.