EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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Prepare the journal entries, with appropriate journal entry descriptions, for 2020, including any required year-end adjusting entries. The company prepares annual adjusting entries.
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In the prior year TBTI had paid the entire year’s insurance policy upfront which expired as of December 31, 2020. The insurance premium for 2021 is $5,600. TBTI renewed and paid half the 2021 insurance premium on December 21, 2020.
what would the journal entry be like?
ABC Inc. purchased a 12-month insurance policy on January 1, 2019 for OMR 2400.
At June 30, 2019, The Adjusting Entry should be:
Select one:
Oa. Debit to Insurance Expense, OMR 1200; Credit to Prepaid Insurance for OMR1200
O b.None of the answers are correct
Oc Debit to Insurance Expense. OMR 2400; Credit to Prepaid Insurance for OMR 2400
O d. Debit to Prepaid Insurance, OMR 1400; Credit to Insurance Expense for OMR 1400
Oe. Debit to Prepaid Insurance, OMR 2400: Credit to Cash for OMR 2400
Clear my choice
A review of the ledger of Blue Spruce Corp. at December 31, 2022, produces the following data pertaining to the preparation of annual
adjusting entries.
1. Prepaid Insurance $18,240. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564
on the building was purchased on July 1, 2021, for $11,520. The policy has a term of 3 years. Policy A2958 on the vehicles was
purchased on January 1, 2022, for $6,640. This policy has a term of 2 years.
2. Unearned Rent Revenue $514,800. The company began subleasing office space in its new building on November 1, 2022. At
December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Date
Nov. 1
Dec. 1
Term
(in months)
1.
ei
3.
9
4. Salaries and Wages Payable $0. There are 8 salaried employees. Salaries are paid every Monday for the prior week. 5 employees
receive a salary of $720 each per week, and 3 employees earn $860 each per week. Assume December 31 is…
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- C) Prepaid Insurance $9,900. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on April 1, 2018, for $7,200. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2019, for $4,500.This policy has a term of 2 years Instructions: prepare adjusting entries and post insurance policy in ledger in 31\12\2019arrow_forwardA review of the ledger of Marigold Corp. at December 31, 2022, produces the following data pertaining to the preparation of annual adjusting entries. 1. Prepaid Insurance $12,768. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2021, for $8,064. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2022, for $6,048. This policy has a term of 2 years. 2. Unearned Rent Revenue $360,360. The company began subleasing office space in its new building on November 1, 2022. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. Date Nov. 1 Dec. 1 Term (in months) 1. 2. 3. 3. Notes Payable $33,600. This balance consists of a note for 6 months at an annual interest rate of 9%, dated November 1. Interest will be paid at note maturity. 4. 4. Salaries and Wages Payable $0. There are 8 salaried employees.…arrow_forwardAn examination of Insurance Policies of Standard Company is presented below: Policy Date of Purchase Life of Policy Cost September 1, 2019 4years P25,920 May 1, 2020 2years 18,960 July 31, 2020 1year 9,720 Prepaid Insurance was debited for the cost of each policy at the time of its purchase. Expired insurance was correctly recorded at the end of 2019. What is the balance of Prepaid Insurance at the end of 2020?arrow_forward
- On November 1, 2019, C Laguna Company paid P36,000 to renew its insurance policy for 3 years. On December 31, 2019, C. Laguna’s unadjusted trial balance showed a balance of P900 for prepaid insurance and P44,100 for insurance expense. What amounts should be reported for prepaid insurance and insurance expense in C. Laguna’s December 31, 2019 financial statements? Prepaid InsuranceP34,900 Insurance Expense P10,100 Prepaid InsuranceP33,000 Insurance Expense P12,000 Prepaid InsuranceP34,000 Insurance Expense P12,000 Prepaid InsuranceP34,000 Insurance Expense P11,000arrow_forwardUnder M. Sabio Company’s accounting system, all insurance premiums paid are debited to prepaid insurance. For interim financial reports, M Sabio makes monthly estimated charges to insurance expenses with credits to prepaid insurance. Additional information for the year ended December 31, 2019 are as follows: Prepaid Insurance at December 31, 2018 P120,500 Charges to insurance expense during 2019( including a year- End adjustment of P10,500) 437,500 Prepaid Insurance at December 31, 2019 110,000 What was the total amount of insurance premiums paid by M. Sabio during 2019? P448,000 P427,000 P327,500 P437,500arrow_forwardOn October 1, 2019 your company paid its insurance agent P2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. 1. Prepare the initial entries to record the payment of insurance. 2. What date should be used to record the December adjusting entry? 3. What are the accounts involved in the adjusting entries? 4. Prepare the adjusting entries. 5. How much is the adjusted balance of the Prepaid Insurance?arrow_forward
- For each of the following independent situations, give the journal entries to adjust and correct the books at the end of 2020. In all situations you are to assume that the company in question closes its books on December 31 of each year and that reversing entries have been properly recorded where needed except as indicated. ADJUSTING ENTRIES The trial balance before adjustments on December 31, 2020 shows Prepaid Insurance at $1,500. The insurance coverage consists of one policy that expires on April 1 each year. The renewal premium paid on April 1 for one year in advance was identical to the premium paid the previous year. Rent on unused space is received on May 1 each year for one year in advance. The Unearned Rent account is reported at $1,720 on the trial balance before adjustments on December 31, 2020. The rent received on May 1, 2020, was 10% higher than the rent received on May l of the previous year.…arrow_forwardFor each of the following independent situations, give the journal entries to adjust and correct the books at the end of 2020. In all situations you are to assume that the company in question closes its books on December 31 of each year and that reversing entries have been properly recorded where needed except as indicated. ADJUSTING ENTRIES The trial balance before adjustments on December 31, 2020 shows Prepaid Insurance at $1,500. The insurance coverage consists of one policy that expires on April 1 each year. The renewal premium paid on April 1 for one year in advance was identical to the premium paid the previous year. Rent on unused space is received on May 1 each year for one year in advance. The Unearned Rent account is reported at $1,720 on the trial balance before adjustments on December 31, 2020. The rent received on May 1, 2020, was 10% higher than the rent received on May l of the previous year.…arrow_forward44. On January 18, 2019, Big City Co, paid $36,000 for a two-year insurance premium that covers February 1, 2019 through January 31, 2021. Urban Pro's year-end is March 31, 2019 a. What entry is made on January 18, 2019? b. What adjusting entry should be made on March 31, 2019 before the financial statements are prepared for the year ending March 31, 2019?arrow_forward
- At December 31, 2022, before any year-end adjustments, Blossom Company Prepaid Insurance account had a balance of $6840. It was determined that $3070 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be: O $6840. O $3770. O $3070. O $3300.arrow_forwardOn July 1, 2025, Novak Co. pays $10,200 to Splish Insurance Co. for a 2-year insurance policy. Both companies have fiscal years ending December 31. Journalize the entry on July 1 and the adjusting entry on December 31 for Splish Insurance Co. Splish uses the accounts Unearned Service Revenue and Service Revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Creditarrow_forwardPrepare the adjusting journal entries as of Dec 31, 2019 for the following information gathered from the ledger of Flag Company : a.) Unexpired of the Prepaid Insurance account balance of P 42,500 was P 24,500. b.) Accrued Interest on Notes issued P 1,270. c.) Equipment acquired on March 31, 2019 at P 120,000, has a scrap value of P4,000 with estimated life of 10 years. d) Unrecorded unpaid taxes P 18,500. e.) Unpaid salaries P22,500. £.) Interest received and credited to Unearned Interest Income account was P 14,000 of which only P 12,000 was eamed. g.) Office supplies has a balance of P 8,000, Consumed as of Dec 31, 2019 was P 6,800. h.) Unearned Rent Income account has a balance of P 24,000 of which P 20,000 was rent earned. i.) Office Supplies balance was P5,600 of which P1,600 was consumed. Account Title Debit Credit a.) b.) e.) (P) e.) f.) g.) h.) i)arrow_forward
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