13. Adjusting Journal Entries

Unadjusted Trial Balance December 31, Year 1
	Debits	Credits
Cash	33,900
Accounts Receivable	18,700
Supplies	1,800
Prepaid advertising	900
Equipment	15,000
Accounts Payable		1,200
Unearned Service Revenue		3,000
Common stock		24,000
Retained Earnings		11,200
Service Revenue		76,000
Salaries Expense	41,000
Rent expense	3,600
Utilities	500
	115,400	115,400

Additional Information:

1. Of the balance in the unearned service revenue accounts, $400 had not been earned by year end.
2. On 12/1/Y1, the company rented office space for $1,200 per month for three months and paid the entire $3,600 in cash.
3. On December 1, Year 1, the company paid $900 for six months of advertising.
4. A count of supplies on December 31, Year 1 showed $200 of supplies still on hand.
5. The equipment was purchased on Jan. 1, Year 1. The useful life is estimated to be 10 years. Straight-line depreciation is used and no salvage value is expected.
6. As of 12/31/Y1, salaries of $800 had been earned by employees but still not be paid until 1/1/Y2.

A. Record the necessary adjusting journal entries.
B. Determine net income after adjustments.