Prepaid (deferred) expenses adjustments
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For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31. Step i: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step : Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other
a. Prepaid Insurance. The Prepaid Insurance account has a $4,700 debit balance to start the year. A review of insurance policies and payments shows that $900 of unexpired insurance remains at year-end.
b. Prepaid Insurance. The Prepaid Insurance account has a S5,890 debit balance at the start of the year. A review of insurance policies and payments shows $1,040 of insurance has expired by year-end.
c. Prepaid Rent. On September 1 of the current year, the company prepaid $24,000 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $24,000.
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FUNDAMENTAL ACCT PRIN CONNECT ACCESS
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- The balance in the Prepaid Insurance account before adjustment at the end of the year is P7,200, which represents twelve months’ Insurance purchased on December 1. The adjusting entry required on Dec. 31, 2018 is a. debit Prepaid Insurance, P7,200; credit Insurance Expense, P7,200 b. debit Insurance Expense, P600; credit Insurance Payable, P600 c. debit Insurance Expense, P6,600; credit Prepaid Insurance, P6,600 d. debit Prepaid Insurance, P600; credit Insurance Expense, P600 e. debit, Insurance Expense, P600; credit Prepaid Insurance, P600arrow_forwardHello! I need some help with accounting. I need to jurnalize the adjusting entries. Journalism the adjustments in the order given in the question. General Jurnal Date description. Post debit credit 20-- adjusting entries Mar.31 ______ ______ Mar.31 ______ ______ Mar.31 ______ ______ Mar31 ______ ______ Mar.31 ______ ______ Mar.31 ______ ______ Then I must prepare an income statementarrow_forwardUNCOLLECTIBLE ACCOUNTSALLOWANCE METHOD Lewis Warehouse used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20--: Selected accounts and beginning balances on January 1, 20--, are as follows: REQUIRED 1. Open the three selected general ledger accounts. 2. Enter the transactions and the adjusting and closing entries in a general journal (page 6). After each entry, post to the appropriate selected accounts. 3. Determine the net realizable value as of December 31, 20--.arrow_forward
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