X SPREADSHEET TOOL: Date functions Following are three separate transactions that pertain to prepaid items. Evaluate each item and prepare the journal entries that would be needed for the initial recording and subsequent end-of-20X3 adjusting entry. Assume the company uses the balance sheet approach, and the initial recording is to an asset account. The company has a calendar year-end and does not make any adjusting entries prior to December 31. (1) The company purchased an 18-month insurance policy for $18,000 on June 1, 20X3. The company started 20X3 with $20,000 in supplies (this was previously recorded, and you do not need to make an entry for the beginning balance), purchased $30,000 in supplies during the year, and found only $13,000 in supplies on hand at the end of 20X3. (2) (3) The company paid $2,500 to rent a truck. The rental period began on December 16, 20X3, and ends on February 14, 20X4.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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B-03.04
X
SPREADSHEET
TOOL:
Date
functions
Prepaid expenses
Following are three separate transactions that pertain to prepaid items. Evaluate each item and prepare the
journal entries that would be needed for the initial recording and subsequent end-of-20X3 adjusting entry.
Assume the company uses the balance sheet approach, and the initial recording is to an asset account. The
company has a calendar year-end and does not make any adjusting entries prior to December 31.
(1)
The company purchased an 18-month insurance policy for $18,000 on June 1, 20X3.
(2) The company started 20X3 with $20,000 in supplies (this was previously recorded, and you do not
need to make an entry for the beginning balance), purchased $30,000 in supplies during the year,
and found only $13,000 in supplies on hand at the end of 20X3.
(3) The company paid $2,500 to rent a truck. The rental period began on December 16, 20X3, and ends
on February 14, 20X4.
Transcribed Image Text:B-03.04 X SPREADSHEET TOOL: Date functions Prepaid expenses Following are three separate transactions that pertain to prepaid items. Evaluate each item and prepare the journal entries that would be needed for the initial recording and subsequent end-of-20X3 adjusting entry. Assume the company uses the balance sheet approach, and the initial recording is to an asset account. The company has a calendar year-end and does not make any adjusting entries prior to December 31. (1) The company purchased an 18-month insurance policy for $18,000 on June 1, 20X3. (2) The company started 20X3 with $20,000 in supplies (this was previously recorded, and you do not need to make an entry for the beginning balance), purchased $30,000 in supplies during the year, and found only $13,000 in supplies on hand at the end of 20X3. (3) The company paid $2,500 to rent a truck. The rental period began on December 16, 20X3, and ends on February 14, 20X4.
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