Reference no: EM132561796

Question - Computer Games Ltd reported a profit of $55,390 for the year ending 31 December 2016. However, upon closer examination of the accounting records, the chief financial officer noticed the following important information.

1. Service Revenues included an advance of $19,040 for computer games to be delivered in March of the following year.

2. There was $2,380 of advertising supplies on hand at 31 December that was recorded as Supplies Expense.

3. Prepaid Insurance included an amount of $11,880, which is the whole amount paid on 1 October 2016 for a 1-year policy.

4. The following invoices had not been paid: advertising for week of 24 December, $2,480; repairs made on 10 December, $2,170; and electricity expense, $850.

5. At 31 December, 2 days' wages had not been accrued or paid, amounting to $390.6.The business took out a loan of $236,400 on 1 January 2016 at an annual interest rate of 9%. The amount for interest expense for the month of December was not accrued.

Required - Prepare the journal entries to record the missing transactions or events. Ignore GST.

1. (To adjust the Service Revenue account for revenue received in advance)

2. (To adjust the supplies expense account for supplies still on hand)

3. (To adjust the prepaid insurance to recognise the amount expired)

4. (To record accrued advertising expenses)(To record accrued repairs expenses)(To record accrued electricity expenses)

5. (To recorded accrued wages)

6. (To record accrued interest)