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AccountingFinancial Accounting

Adjusted Trial Balance: Accrued Interest and Unexpired Insurance

Accrued interest adds a receivable and revenue; expired insurance raises expense to $16,000, with adjusted totals of $220,200.

Question

Prepare an adjusted trial balance using these balances, all on their normal sides:

AccountBalance ($)
Accounts Payable18,000
Accounts Receivable4,000
Investments88,000
Cash19,000
Common Stock30,000
Dividends16,000
Prepaid Insurance20,000
Insurance Expense8,000
Land26,000
Notes Payable (long term)55,000
Salaries Expense37,000
Sales Revenue115,000

At period end, investments have earned 2,200 dollars of unrecorded interest; 12,000 dollars of the insurance remains unexpired.

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Evidence boundary

This solution uses OpenStax Chapter 4, Problem Set B, PB16, with normal account balances and only the two stated adjustments. The $12,000 insurance amount is the remaining prepaid asset, not an additional expense. No missing retained earnings, cash collection, or closing entries are invented.