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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Great Manufacturing Company received and paid a premium notice on January 2 for workers’ compensation insurance stating the rates for the new year. Estimated employees’ earnings for the year are as follows:

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At the end of the year, the exact figures for the payroll are as follows:

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  1. a. Record the estimated premium entry for the payment on January 2, in general journal form.
  2. b. Record the adjusting entries on December 31 for the insurance expired and for the additional premium.

a.

To determine

Prepare journal entry to record the estimated premium entry for the payment on January 2.

Explanation

Payroll:

Payroll refers to the total amount that is required to be paid by the company to its employees during a week, month or other period. It is the financial record of the wages and bonus, net pay, salary and deductions of a company’s employees.

DateAccount Title and explanationDebit ($)Credit ($)
January  2Prepaid insurance worker’s compensation 6,176.00 
     Cash  6,176...

b.

To determine

Prepare adjusting entry to record the insurance expired

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