Laramie,Inc.signed a contract with a service provider for security services at a rate of $260 per month for the period of January through June.Laramie,Inc.will pay the service provider the entire amount at the end of June.The company makes adjusting entries each month.During the month of June,it should record total security expense of $520.

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Since Laramie, Inc. signed a contract for security services at a rate of $260 per month for the entire period of January through June, the total expense for security services should be $1,560 ($260 x 6 months). Therefore, the total security expense for the month of June should be $260, not $520. As such, the adjusting entry for the month of June should be to record an expense of $260 and a liability of $260, representing the amount owed to the service provider for the final month of the contract.