On August 1, 2021, Peter Company insured its property with Pru Life Insurance Company and pays premium of P24,000 for one year policy contract covering the period from Aug. 1, 2021 to Aug. 1, 2022. The accounting ends on December 31, 2021. Assuming expense method is used: 1. What is the journai entry to record the advance payment? 2. On December 31, 2021: how much is the unexpired portion of the Insurance premium paid in advance 3. What is the adijusting entry on December 31, 2021? 4. In your adjusting antry, what account wilt you record, Asset or Expense? 5. In your adjusting entry, are you increasing or decreasing the amount of your Insurance Expense account? 6. After posting the adjusting entry. how much is the balance of the Insurance Expense account? Assuming asset method is used: 7. What is the journal entry to record the advance payment? 8. How much is the unexpired portion of the Insurance Expense account as of December 31, 2021? 9. What is the adjusting entry on December 31, 2021? 10. In your adjusting entry, whet account wi!! you record, Asset or Expense? 11. In your adjusting entry, are you increasing or decreasing the amount of your Prepaid Insurance account? 12 After posting the adjusting entry, how much is the balance oi the Prepaid Insurance account?
On August 1, 2021, Peter Company insured its property with Pru Life Insurance Company and pays premium of P24,000 for one year policy contract covering the period from Aug. 1, 2021 to Aug. 1, 2022. The accounting ends on December 31, 2021. Assuming expense method is used: 1. What is the journai entry to record the advance payment? 2. On December 31, 2021: how much is the unexpired portion of the Insurance premium paid in advance 3. What is the adijusting entry on December 31, 2021? 4. In your adjusting antry, what account wilt you record, Asset or Expense? 5. In your adjusting entry, are you increasing or decreasing the amount of your Insurance Expense account? 6. After posting the adjusting entry. how much is the balance of the Insurance Expense account? Assuming asset method is used: 7. What is the journal entry to record the advance payment? 8. How much is the unexpired portion of the Insurance Expense account as of December 31, 2021? 9. What is the adjusting entry on December 31, 2021? 10. In your adjusting entry, whet account wi!! you record, Asset or Expense? 11. In your adjusting entry, are you increasing or decreasing the amount of your Prepaid Insurance account? 12 After posting the adjusting entry, how much is the balance oi the Prepaid Insurance account?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On August 1, 2021, Peter Company insured its property with Pru Life Insurance Company and pays
premium of P24,000 for one year policy contract covering the period frorn Aug. 1, 2021 to Aug. 1, 2022.
The accounting ends on December 31, 2021.
Assuming expense method is used:
1. What is the journal entry to record the advance payment?
2. On December 31, 2021: how much is the unexpired portion of the lInsurance premium paid in
advance
3. What is the adjusting entry on December 31, 2021?
4. In your adjusting antry, what account wil you record, Asset or Expense?
5. In your adjusting entry, are you increasing or decreasing the amount of your Insurance Expense
account?
6. After posting the adjusting entry, how much is the balance of the Insurance Expense account?
Assuming asset method is used:
7. What is the journal entry to record the advance payment?
8. How much is the unexpired portion of the Insurance Expense account as of December 31, 2021?
9. What is the adjusting entry on December 31, 2021?
10. In your adjusting entry, whet account will you record, Asset or Expense?
11. In your adjusting entry, are you increasing or decreasing the amoun! of your Prepaid Insurance
account?
12. After posting the adjusting entry, how much is the balance of the Prepaid Insurance account?
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