On December 31, the adjusted trial balance of Pronghorn Employment Agency shows the following selected data. Accounts Receivable $23,200 Service Revenue $92,500
Interest Expense 7,400 Interest Payable 1,200
Analysis shows that adjusting entries were made to (1) accrue $6,900 of service revenue and (2) accrue $1,200 interest expense.
Instructions
a. Prepare the closing entries for the temporary accounts shows above at December 31.
b. Prepare the reversing entries on January 1.
c. Post the entries in (a) and (b). Underline and balance the accounts. (Use T-Accounts)
d. Prepare the entries to record (1) the collection of the accrued revenue on January 10 and (2) the payment of all interest due ($3,000) on January 15.
e. Post the entries in (d) to the temporary accounts.

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