Expense Adjustments Faraday Electronic Service repairs stereos and DVD players. During the year, Faraday engaged in the following activities: a. On September 1, Faraday paid Wausau Insurance $4,320 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance. b. At December 31, Faraday estimates that $1,700 of utility costs are unrecorded and unpaid. C. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $3,300 is unpaid and unrecorded at December 31. d. In late October, Faraday agreed to become the sponsor for the sports segment of the evening news program on a local television station. The station billed Faraday $6,900 for 3 months' sponsorship-November, December, and January-in advance. When these payments were made, Faraday debited prepaid advertising. At December 31, 2 months' advertising has been used and 1 month remains unused. Required: 1. Prepare adjusting entries at December 31 for these four activities. If an amount box does not require an entry, leave it blank. Insurance Expense v Dec. 31 Prepaid Insurance v Utilities Expense Dec 31
Expense Adjustments Faraday Electronic Service repairs stereos and DVD players. During the year, Faraday engaged in the following activities: a. On September 1, Faraday paid Wausau Insurance $4,320 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance. b. At December 31, Faraday estimates that $1,700 of utility costs are unrecorded and unpaid. C. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $3,300 is unpaid and unrecorded at December 31. d. In late October, Faraday agreed to become the sponsor for the sports segment of the evening news program on a local television station. The station billed Faraday $6,900 for 3 months' sponsorship-November, December, and January-in advance. When these payments were made, Faraday debited prepaid advertising. At December 31, 2 months' advertising has been used and 1 month remains unused. Required: 1. Prepare adjusting entries at December 31 for these four activities. If an amount box does not require an entry, leave it blank. Insurance Expense v Dec. 31 Prepaid Insurance v Utilities Expense Dec 31
Chapter1: Financial Statements And Business Decisions
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Expense Adjustments
Faraday Electronic Service repairs stereos and DVD players. During the year, Faraday engaged in the following activities:
a. On September 1, Faraday paid Wausau Insurance $4,320 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid
insurance.
b. At December 31, Faraday estimates that $1,700 of utility costs are unrecorded and unpaid.
C. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $3,300 is unpaid and unrecorded at December 31.
d. In late October, Faraday agreed to become the sponsor for the sports segment of the evening news program on a local television station. The station billed Faraday
$6,900 for 3 months' sponsorship-November, December, and January-in advance. When these payments were made, Faraday debited prepaid advertising. At
December 31, 2 months' advertising has been used and 1 month remains unused.
Required:
1. Prepare adjusting entries at December 31 for these four activities. If an amount box does not require an entry, leave it blank.
Dec. 31 Insurance Expense v
Prepaid Insurance v
Dec. 31
Utilities Expense
Utilities Payable v
Rent Expense v
Dec. 31
Rent Payable
Dec. 31 Advertising Expense
Prepaid Advertising
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