2. JM Company is completing its accounting cycle for the year ended September 30, 2018....
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2. JM Company is completing its accounting cycle for the year ended September 30, 2018. Before preparing financial statements, the following information is available with respect to adjusting entries at year-end. a. JM performed services for $2,000 at the end of September and has not yet recorded the transaction. Payment will be received in October. b. On August 1, JM prepaid $3,600 for advertising. At the end of September, 75% of the ads were completed. JM recorded the full amount of the prepayment to Prepaid Advertising Expense. C. JM borrowed $60,000 at 7% annual interest rate on April 1 of the current year. The loan requires JM to pay interest annually each March 31st for ten years with the principal repaid at the end of the loan period. d. A client paid JM $15,000 on August 1 for work to be completed evenly over the next 6 months. JM recorded the full amount to Unearned Revenue on August 1. e. Annual depreciation expense for the year ended September 30 is $9,000. Required: 1. Identify each of these transactions as either deferred revenue, deferred expense, accrued revenue or accrued expense. 2. Prepare the adjusting entries that should be recorded for the year ended September 30, 2018. Indicate the effect (11) for each transaction
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