Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 3, Problem 3.3AP
Record
The information necessary for preparing the 2018 year-end adjusting entries for Gamecock Advertising Agency appears below. Gamecock’s fiscal war-end is December 31.
a. On July 1, 2018, Gamecock receives $6,000 from a customer for advertising services to be given evenly over the next 10 months. Gamecock credits Deferred Revenue.
b. At the beginning of the year, Gamecock’s
c. On May 1, 2018, the company pays $4,800 for a two-year fire and liability insurance policy and debits Prepaid Insurance.
d. On September 1, 2018, the company borrows $20,000 from a local bank and signs a note. Principal and interest at 12% will be paid on August 31, 2019.
c. At year-end there is a $2,700 debit balance in the Supplies (asset) account. Only $1,000 of supplies remains on hand.
Required:
Record the necessary adjusting entries on December 31, 2018. No prior adjustments have been made during 2018.
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Chapter 3 Solutions
Financial Accounting
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