On September 1, 2020, a student paid $6,000 for tuition for the academic year to his college (half for fall 2020 and half for spring 2021). Provide all necessary journal entries for the student in 2020. The following trial balance was taken from the books of Fisk Corporation on December 31, 2019.
Account Debit Credit
Cash $ 8,000
Account Receivable 40,000
Notes receivable 10,000
Allowance for Doubtful Accounts $ 1,800
Inventory 44,000
Prepaid Insurance 4,800
Equipment 110,000
Accumulated Depreciation-Equip 15,000
Account Payable 9,800
Common Stock 44,000
Retained Earnings 55,000
Sales Revenue 280,000
Cost of goods sold 126,000
Salaries and wages Expense 50,000
Rent Expense 12,800
Totals $405,600 $405,600
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of sales revenue.
c. Depreciation on equipment, 5% per year on original cost.
d. Interest at 5% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries and wages at December 31, $5,800.
Required:
(a) Prepare the necessary adjusting entries.
(b) Calculate the ending balance of retained earnings