Miller Corporation paid $1,800 and purchased a two-year insurance on September 1, 2020. The policy period starts September 1, 2020 and runs until August 31, 2022. Miller Corporation's fiscal year ends December 31. The company records adjusting entries only at year end.
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- Hunter Corporation pays an annual insurance premium of $8,500 to cover the lives of its board officers. According to the terms of the insurance contract, the cash surrender value of the policies increase from $10,000 to $11,500 during that year. The adjusting entry that Hunter would record at the end of the year to increase the cash surrender value would include a credit to Insurance Expense for $8,500. debit to Prepaid Insurance for $8,500. debit to Cash Surrender Value of Life Insurance for $1,500. credit to Cash for $1,500.Ivanhoe Factory provides a 2-year warranty with one of its products which was first sold in 2020. Ivanhoe sold $909,800 of products subject to the warranty. Ivanhoe expects $124,480 of warranty costs over the next 2 years. In that year, Ivanhoe spent $73,090 servicing warranty claims. Prepare Ivanhoe's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date 2020 During 2020 12/31/20 Account Titles and Explanation (To record sales) (To record warranty claims) Debit CreditOn July 1, Alton Co. issued an $74,700, 10%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using a 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year? When required, round your answer to the nearest dollar. Select the correct answer. a-$1,246 b-$1,869 c-$7,470 d-$623
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- On January 2, 2020, Crane Company sells production equipment to Fargo Inc. for $46,000. Crane includes a 2-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on January 2, 2020. During 2020, Crane incurs costs related to warranties of $930. At December 31, 2020, Crane estimates that $620 of warranty costs will be incurred in the second year of the warranty. Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020 (assuming financial statements are prepared on December 31, 2020). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)Takemoto Corporation borrowed $60,000 on November 1, 2017, by signing a $61,350, 3-month, zero-interest bearing note. Prepare Takemoto’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry.