Recording prepaid expenses and unearned revenues Al-Hoda Co. had the following transactions in the last two months of its fiscal year ended May 31. RECORDING ENTRIES Apr. 1 Paid $2,450 cash to an accounting firm for future consulting services. 1 Paid $3,600 cash for 12 months of insurance through March 31 of the next year. 30 Received $8,500 cash for future services to be provided to a customer. May 1 Paid $4,450 cash for future newspaper advertising. 23 Received $10,450 cash for future services to be provided to a customer. ADJUSTING ENTRIES: 31 Of the consulting services paid for on April 1, $2,000 worth has been received. 31 A portion of the insurance paid for on April 1 has expired. No adjustment was made in April to Prepaid Insurance. 31 Services worth $4,600 are not yet provided to the customer who paid on April 30. 31 Of the advertising paid for on May 1, $2,050 worth is not yet used. 31 The company has performed $5,500 of services that the customer paid for on May 23. Required: - Prepare recording entries during the year for these transactions under the method that records prepaid expenses and unearned revenues at the time cash is paid or received in the balance sheet accounts.
Recording prepaid expenses and unearned revenues
Al-Hoda Co. had the following transactions in the last two months of its fiscal year ended May 31.
RECORDING ENTRIES
|
Apr. |
1 |
Paid $2,450 cash to an accounting firm for future consulting services. |
|
|
1 |
Paid $3,600 cash for 12 months of insurance through March 31 of the next year. |
|
|
30 |
Received $8,500 cash for future services to be provided to a customer. |
|
May |
1 |
Paid $4,450 cash for future newspaper advertising. |
|
|
23 |
Received $10,450 cash for future services to be provided to a customer. |
|
|
31 |
Of the consulting services paid for on April 1, $2,000 worth has been received. |
|
|
31 |
A portion of the insurance paid for on April 1 has expired. No adjustment was made in April to Prepaid Insurance. |
|
|
31 |
Services worth $4,600 are not yet provided to the customer who paid on April 30. |
|
|
31 |
Of the advertising paid for on May 1, $2,050 worth is not yet used. |
|
|
31 |
The company has performed $5,500 of services that the customer paid for on May 23. |
Required: -
- Prepare recording entries during the year for these transactions under the method that records prepaid expenses and unearned revenues at the time cash is paid or received in the
balance sheet accounts.
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