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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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