Recording prepaid expenses and unearned revenues Mahdy Co. had the following transactions in the last two months of its year ended December 31. RECORING ENTRIES Nov. 1 Paid $1,800 cash for future newspaper advertising. 1 Paid $2,460 cash for 12 months of insurance through October 31 of the next year. 30 Received $3,600 cash for future services to be provided to a customer. Dec. 1 Paid $3,000 cash for a consultant’s services to be received over the next three months. 15 Received $7,950 cash for future services to be provided to a customer. ADJUSTING ENTRIES 31 Of the advertising paid for on November $1,200 worth is not yet used. 31 A portion of the insurance paid for on November 1 has expired. No adjustment was made in November to Prepaid Insurance. 31 Services worth $1,500 are not yet provided to the customer who paid on November 30. 31 One-third of the consulting services paid for on December 1 have been received. 31 The company has performed $3,300 of services that the customer paid for on December 15. Required Prepare recording entries during the year for these transactions under the method that records prepaid expenses and unearned revenues at the time cash is paid or received in the balance sheet accounts.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter3: Processing Accounting Information

Section: Chapter Questions

Problem 3.12MCE: Determining an Ending Account Balance Jessies Accounting Services was organized on June 1. The...

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

Recording prepaid expenses and unearned revenues

Mahdy Co. had the following transactions in the last two months of its year ended December 31.

RECORING ENTRIES

Nov. 1		Paid $1,800 cash for future newspaper advertising.
1		Paid $2,460 cash for 12 months of insurance through October 31 of the next year.
30		Received $3,600 cash for future services to be provided to a customer.
Dec. 1		Paid $3,000 cash for a consultant’s services to be received over the next three months.
15		Received $7,950 cash for future services to be provided to a customer. ADJUSTING ENTRIES
31		Of the advertising paid for on November $1,200 worth is not yet used.
31		A portion of the insurance paid for on November 1 has expired. No adjustment was made in November to Prepaid Insurance.
31		Services worth $1,500 are not yet provided to the customer who paid on November 30.
31		One-third of the consulting services paid for on December 1 have been received.
31		The company has performed $3,300 of services that the customer paid for on December 15.

Required

Prepare recording entries during the year for these transactions under the method that records prepaid expenses and unearned revenues at the time cash is paid or received in the balance sheet accounts.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions