ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2019 for $900. At December 31, 2019, the adjusting journal entry to record expiration of this asset will include a:
o Debit to Insurance Expense and a credit to Prepaid Insurance for $900
o Debit to Prepaid Insurance and a credit to Insurance Expense for $100
o Debit to Insurance Expense and a credit to Prepaid Insurance for $75
o None of the above
A review of the ledger of Blue Spruce Corp. at December 31, 2022, produces the following data pertaining to the preparation of annual
adjusting entries.
1. Prepaid Insurance $18,240. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564
on the building was purchased on July 1, 2021, for $11,520. The policy has a term of 3 years. Policy A2958 on the vehicles was
purchased on January 1, 2022, for $6,640. This policy has a term of 2 years.
2. Unearned Rent Revenue $514,800. The company began subleasing office space in its new building on November 1, 2022. At
December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Date
Nov. 1
Dec. 1
Term
(in months)
1.
ei
3.
9
4. Salaries and Wages Payable $0. There are 8 salaried employees. Salaries are paid every Monday for the prior week. 5 employees
receive a salary of $720 each per week, and 3 employees earn $860 each per week. Assume December 31 is…
C) Prepaid Insurance $9,900. The company has separate insurance policies on
its buildings and its motor vehicles. Policy B4564 on the building was
purchased on April 1, 2018, for $7,200. The policy has a term of 3 years.
Policy A2958 on the vehicles was purchased on January 1, 2019, for
$4,500.This policy has a term of 2 years
Instructions: prepare adjusting entries and post insurance policy in ledger in
31\12\2019
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Similar questions
- A review of the ledger of Marigold Corp. at December 31, 2022, produces the following data pertaining to the preparation of annual adjusting entries. 1. Prepaid Insurance $12,768. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2021, for $8,064. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2022, for $6,048. This policy has a term of 2 years. 2. Unearned Rent Revenue $360,360. The company began subleasing office space in its new building on November 1, 2022. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. Date Nov. 1 Dec. 1 Term (in months) 1. 2. 3. 3. Notes Payable $33,600. This balance consists of a note for 6 months at an annual interest rate of 9%, dated November 1. Interest will be paid at note maturity. 4. 4. Salaries and Wages Payable $0. There are 8 salaried employees.…arrow_forwardc. On September 1, 2019, North Dakota Manufacturing paid a premium of $13,560 in cash for a one-year insurance policy. On December 31, 2019, an examination of the insurance records showed that coverage for a period of four months had expired. Record the adjustment for insurance expired. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31, 2019arrow_forwardOn November 1, 2019, C Laguna Company paid P36,000 to renew its insurance policy for 3 years. On December 31, 2019, C. Laguna’s unadjusted trial balance showed a balance of P900 for prepaid insurance and P44,100 for insurance expense. What amounts should be reported for prepaid insurance and insurance expense in C. Laguna’s December 31, 2019 financial statements? Prepaid InsuranceP34,900 Insurance Expense P10,100 Prepaid InsuranceP33,000 Insurance Expense P12,000 Prepaid InsuranceP34,000 Insurance Expense P12,000 Prepaid InsuranceP34,000 Insurance Expense P11,000arrow_forward
- Under M. Sabio Company’s accounting system, all insurance premiums paid are debited to prepaid insurance. For interim financial reports, M Sabio makes monthly estimated charges to insurance expenses with credits to prepaid insurance. Additional information for the year ended December 31, 2019 are as follows: Prepaid Insurance at December 31, 2018 P120,500 Charges to insurance expense during 2019( including a year- End adjustment of P10,500) 437,500 Prepaid Insurance at December 31, 2019 110,000 What was the total amount of insurance premiums paid by M. Sabio during 2019? P448,000 P427,000 P327,500 P437,500arrow_forwardOn October 1, 2019 your company paid its insurance agent P2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. 1. Prepare the initial entries to record the payment of insurance. 2. What date should be used to record the December adjusting entry? 3. What are the accounts involved in the adjusting entries? 4. Prepare the adjusting entries. 5. How much is the adjusted balance of the Prepaid Insurance?arrow_forward44. On January 18, 2019, Big City Co, paid $36,000 for a two-year insurance premium that covers February 1, 2019 through January 31, 2021. Urban Pro's year-end is March 31, 2019 a. What entry is made on January 18, 2019? b. What adjusting entry should be made on March 31, 2019 before the financial statements are prepared for the year ending March 31, 2019?arrow_forward
- At December 31, 2022, before any year-end adjustments, Blossom Company Prepaid Insurance account had a balance of $6840. It was determined that $3070 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be: O $6840. O $3770. O $3070. O $3300.arrow_forwardWhat are the adjusting entries?arrow_forwardOn July 1, 2025, Novak Co. pays $10,200 to Splish Insurance Co. for a 2-year insurance policy. Both companies have fiscal years ending December 31. Journalize the entry on July 1 and the adjusting entry on December 31 for Splish Insurance Co. Splish uses the accounts Unearned Service Revenue and Service Revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date July 1 Dec. 31 Account Titles and Explanation Prepaid Insurance Cash Service Revenue Unearned Service Revenue Debit 10200 2550 Credit 10200 2550arrow_forward
- On July 1, 2025, Novak Co. pays $10,200 to Splish Insurance Co. for a 2-year insurance policy. Both companies have fiscal years ending December 31. Journalize the entry on July 1 and the adjusting entry on December 31 for Splish Insurance Co. Splish uses the accounts Unearned Service Revenue and Service Revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Creditarrow_forwardPrepare the adjusting journal entries as of Dec 31, 2019 for the following information gathered from the ledger of Flag Company : a.) Unexpired of the Prepaid Insurance account balance of P 42,500 was P 24,500. b.) Accrued Interest on Notes issued P 1,270. c.) Equipment acquired on March 31, 2019 at P 120,000, has a scrap value of P4,000 with estimated life of 10 years. d) Unrecorded unpaid taxes P 18,500. e.) Unpaid salaries P22,500. £.) Interest received and credited to Unearned Interest Income account was P 14,000 of which only P 12,000 was eamed. g.) Office supplies has a balance of P 8,000, Consumed as of Dec 31, 2019 was P 6,800. h.) Unearned Rent Income account has a balance of P 24,000 of which P 20,000 was rent earned. i.) Office Supplies balance was P5,600 of which P1,600 was consumed. Account Title Debit Credit a.) b.) e.) (P) e.) f.) g.) h.) i)arrow_forward.arrow_forward
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