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 $8,520 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to pre insurance. b. At December 31, Faraday estimates that $1,470 of utility costs are unrecorded and unpaid. c. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $2,830 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 Farac $6,300 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 ✔ Prepaid Insurance Dec. 31 Utilities Expense Utilities Payable Dec. 31 Rent Expense Rent Payable Dec. 31 Advertising Expense Prepaid Advertising V - V X 00 00 00 38 X
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 $8,520 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to pre insurance. b. At December 31, Faraday estimates that $1,470 of utility costs are unrecorded and unpaid. c. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $2,830 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 Farac $6,300 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 ✔ Prepaid Insurance Dec. 31 Utilities Expense Utilities Payable Dec. 31 Rent Expense Rent Payable Dec. 31 Advertising Expense Prepaid Advertising V - V X 00 00 00 38 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $8,520 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepa
insurance.
b. At December 31, Faraday estimates that $1,470 of utility costs are unrecorded and unpaid.
c. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $2,830 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
$6,300 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
X
E
Prepaid Insurance
Dec. 31 Utilities Expense
Utilities Payable
Dec. 31 Rent Expense
Rent Payable
Dec. 31 Advertising Expense
Prepaid Advertising
3
00 00
X
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