Terry Thomas opens the Green Thumb Lawn Care Company on April 1. At April 30, the trial balance shows the following balances for the selected accounts.
|
Prepaid Insurance
|
RM 3,600
|
|
Equipment
|
28,000
|
|
Notes Payable
|
20,000
|
|
Unearned Revenue
|
4,200
|
|
Service Revenue
|
1,800
|
Analysis reveals the following additional data.
- Prepaid insurance is the cost of a 2-year insurance policy, effective April 1.
- Depreciation on the equipment is RM 500 per month.
- The notes payable is dated April 1, 12% per annum.
- Six customers paid the company's 7-months' lawn service package of RM 4,200 beginning in April. These customers were serviced in April.
- Lawn services provided other customers but not billed at April 30 total RM 1,500.
Instructions:
Prepare the adjusting entries for the month of April. Show computation.