E3-15 Applying the time-period concept [5–10 min]
Consider the following situations:
a. Business receives $2,000 on January 1 for 10-month service contract for the period January 1 through October 31.
b. Total salary for all employees is $3,000 per month. Employees are paid on the 1st and 15th of the month.
c. Work performed but not yet billed to customers for the month is $900.
d. The company pays interest on its $10,000, 6% note payable of $50 on the first day of each month.
Requirement
1. Assume the company records adjusting entries monthly. Calculate the amount of
each adjustment needed, if any, as of February 28.
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