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    Journalizing adjusting entries and preparation of an IS

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    P2-3A Grant Advertising Agency Inc. was organized in January 2002. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2002.

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    The solution includes a word document and an excel sheet that answer the following questions:

    Grant Advertising Agency Inc. was organized in January 2002. Presented below are
    both the adjusted and unadjusted trial balances as of December 31, 2002.

    (a) Journalize the annual adjusting entries that were made.
    (b) Prepare an income statement and a retained earnings statement for the year ending
    December 31, 2002, and a balance sheet at December 31.
    (c) Answer the following questions.
    (1) If the note has been outstanding 6 months, what is the annual interest rate on that
    note?
    (2) If the company paid $13,500 in salaries in 2002, what was the balance in Salaries
    Payable on December 31, 2001?

    $2.19

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