Can someone please check this?Gomez Company had the following transactions in the last two months of its year ended December 31.November 1Paid $2,000 cash for future advertising.November 1Paid $3,120 cash for 12 months of insurance through October 31 of the next year.November 30Received $6,600 cash for future services to be provided to a customer.December 1Paid $12,000 cash for consulting to be received over the next eight months.December 15Received $10,550 cash for future services to be provided to a customer.December 31Of the advertising paid for on November 1, $1,450 worth is not yet used.December 31A portion of the insurance paid for on November 1 has expired. No adjustment was made in November.December 31Services worth $1,100 are not yet provided to the customer who paid on November 30.December 31One-eighth of the consulting paid for on December 1 has been received.December 31The company has performed $3,900 of services that the customer paid for on December 15.Required:Prepare entries for these transactions under the method that initially records prepaid expenses as assets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year.Prepare entries for these transactions under the method that initially records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year. **Accounting Journal Entries and Adjustments**This section covers the preparation of journal entries for various transactions under a method that initially records prepaid expenses as expenses and unearned revenues as revenues. Adjusting entries will also be made at the end of the year. Please note that if no entry is required for a transaction/event, you should select "No journal entry required" in the first account field.Below is the detailed breakdown of the transactions and their journal entries:| No | Date | General Journal | Debit | Credit ||----|---------------|-------------------------|-------|--------|| 1 | November 01 | Prepaid advertising | 2,000 | || 2 | November 01 | Prepaid insurance | 3,120 | || 3 | November 30 | Unearned revenue | | 6,600 || 4 | December 01 | Prepaid consulting | 12,000| || 5 | December 15 | Unearned revenue | | 10,550 || 6 | December 31 | No journal entry required | | || 7 | December 31 | No journal entry required | | || 8 | December 31 | No journal entry required | | || 9 | December 31 | No journal entry required | | || 10 | December 31 | Service revenue | | 3,900 |Explanation of Entries:1. **November 01 - Prepaid Advertising**: - An amount of $2,000 was paid for advertising, recorded as a prepaid expense. 2. **November 01 - Prepaid Insurance**: - An amount of $3,120 was paid for insurance, recorded as a prepaid expense.3. **November 30 - Unearned Revenue**: - Revenue of $6,600 was received but not yet earned, hence recorded as unearned revenue.4. **December 01 - Prepaid Consulting**: - An amount of $12,000 was paid for consulting services, recorded as a prepaid expense.5. **December 15 - Unearned Revenue**: - Revenue of $10,550 was received but not yet earned, hence recorded as unearned revenue.6 ### Educational Website Content: Understanding Journal Entries for Prepaid Expenses and Unearned Revenues#### Overview:This instruction aims to teach how to prepare journal entries for transactions under the method that records prepaid expenses as assets and records unearned revenues as liabilities. Additionally, it includes preparing adjusting entries at the end of the year.**Note**: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.#### Journal Entries:| No | Date | General Journal | Debit | Credit ||----|-------------------|-----------------------|--------|---------|| 1 | November 01 | Prepaid advertising | 2,000 | || 2 | November 01 | Prepaid insurance | 3,120 | || 3 | November 30 | Unearned revenue | | 6,600 || 4 | December 01 | Prepaid consulting | 12,000 | || 5 | December 15 | Unearned revenue | | 105,500 || 6 | December 31 | No journal entry required | | || 7 | December 31 | No journal entry required | | || 8 | December 31 | No journal entry required | | || 9 | December 31 | No journal entry required | | || 10 | December 31 | Service revenue | 3,900 | |#### Explanation of Entries:1. **November 01 (Prepaid Advertising)**: - Debit: Prepaid advertising (asset) for $2,000. This represents payment for advertising at a future date, considered a prepaid expense.2. **November 01 (Prepaid Insurance)**: - Debit: Prepaid insurance (asset) for $3,120. This entry records payment for insurance coverage to be used in the future, categorized as a prepaid expense.3. **November 30 (Unearned Revenue)**: - Credit: Unearned revenue (liability) for $6,600. This is cash received in advance for a service or product to be delivered later.4. **December 01 (Prepaid Consulting)**: - Debit: Prepaid consulting (asset) for $

Journal Entry- Method of recording financial transactions in the book of original entry by debiting…

Can someone please check this? Gomez Company had the following transactions in the last two months of its year ended December 31. November 1 Paid $2,000 cash for future advertising. November 1 Paid $3,120 cash for 12 months of insurance through October 31 of the next year. November 30 Received $6,600 cash for future services to be provided to a customer. December 1 Paid $12,000 cash for consulting to be received over the next eight months. December 15 Received $10,550 cash for future services to be provided to a customer. December 31 Of the advertising paid for on November 1, $1,450 worth is not yet used. December 31 A portion of the insurance paid for on November 1 has expired. No adjustment was made in November. December 31 Services worth $1,100 are not yet provided to the customer who paid on November 30. December 31 One-eighth of the consulting paid for on December 1 has been received. December 31 The company has performed $3,900 of services that the customer paid for on December 15. Required: Prepare entries for these transactions under the method that initially records prepaid expenses as assets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year. Prepare entries for these transactions under the method that initially records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

November 1	Paid $2,000 cash for future advertising.
November 1	Paid $3,120 cash for 12 months of insurance through October 31 of the next year.
November 30	Received $6,600 cash for future services to be provided to a customer.
December 1	Paid $12,000 cash for consulting to be received over the next eight months.
December 15	Received $10,550 cash for future services to be provided to a customer.
December 31	Of the advertising paid for on November 1, $1,450 worth is not yet used.
December 31	A portion of the insurance paid for on November 1 has expired. No adjustment was made in November.
December 31	Services worth $1,100 are not yet provided to the customer who paid on November 30.
December 31	One-eighth of the consulting paid for on December 1 has been received.
December 31	The company has performed $3,900 of services that the customer paid for on December 15.

Required:

Prepare entries for these transactions under the method that initially records prepaid expenses as assets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year.
Prepare entries for these transactions under the method that initially records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year.

**Accounting Journal Entries and Adjustments**

This section covers the preparation of journal entries for various transactions under a method that initially records prepaid expenses as expenses and unearned revenues as revenues. Adjusting entries will also be made at the end of the year. Please note that if no entry is required for a transaction/event, you should select "No journal entry required" in the first account field.

Below is the detailed breakdown of the transactions and their journal entries:

| No | Date | General Journal | Debit | Credit |
|----|---------------|-------------------------|-------|--------|
| 1 | November 01 | Prepaid advertising | 2,000 | |
| 2 | November 01 | Prepaid insurance | 3,120 | |
| 3 | November 30 | Unearned revenue | | 6,600 |
| 4 | December 01 | Prepaid consulting | 12,000| |
| 5 | December 15 | Unearned revenue | | 10,550 |
| 6 | December 31 | No journal entry required | | |
| 7 | December 31 | No journal entry required | | |
| 8 | December 31 | No journal entry required | | |
| 9 | December 31 | No journal entry required | | |
| 10 | December 31 | Service revenue | | 3,900 |

Explanation of Entries:

1. **November 01 - Prepaid Advertising**:
- An amount of $2,000 was paid for advertising, recorded as a prepaid expense.

2. **November 01 - Prepaid Insurance**:
- An amount of $3,120 was paid for insurance, recorded as a prepaid expense.

3. **November 30 - Unearned Revenue**:
- Revenue of $6,600 was received but not yet earned, hence recorded as unearned revenue.

4. **December 01 - Prepaid Consulting**:
- An amount of $12,000 was paid for consulting services, recorded as a prepaid expense.

5. **December 15 - Unearned Revenue**:
- Revenue of $10,550 was received but not yet earned, hence recorded as unearned revenue.

6

### Educational Website Content: Understanding Journal Entries for Prepaid Expenses and Unearned Revenues

#### Overview:
This instruction aims to teach how to prepare journal entries for transactions under the method that records prepaid expenses as assets and records unearned revenues as liabilities. Additionally, it includes preparing adjusting entries at the end of the year.

**Note**: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

#### Journal Entries:

| No | Date | General Journal | Debit | Credit |
|----|-------------------|-----------------------|--------|---------|
| 1 | November 01 | Prepaid advertising | 2,000 | |
| 2 | November 01 | Prepaid insurance | 3,120 | |
| 3 | November 30 | Unearned revenue | | 6,600 |
| 4 | December 01 | Prepaid consulting | 12,000 | |
| 5 | December 15 | Unearned revenue | | 105,500 |
| 6 | December 31 | No journal entry required | | |
| 7 | December 31 | No journal entry required | | |
| 8 | December 31 | No journal entry required | | |
| 9 | December 31 | No journal entry required | | |
| 10 | December 31 | Service revenue | 3,900 | |

#### Explanation of Entries:

1. **November 01 (Prepaid Advertising)**:
- Debit: Prepaid advertising (asset) for $2,000. This represents payment for advertising at a future date, considered a prepaid expense.

2. **November 01 (Prepaid Insurance)**:
- Debit: Prepaid insurance (asset) for $3,120. This entry records payment for insurance coverage to be used in the future, categorized as a prepaid expense.

3. **November 30 (Unearned Revenue)**:
- Credit: Unearned revenue (liability) for $6,600. This is cash received in advance for a service or product to be delivered later.

4. **December 01 (Prepaid Consulting)**:
- Debit: Prepaid consulting (asset) for $

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 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.