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For each separate case below, follow the three-step process for adjusting the prepald asset account at Deceml Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $6,100 debit balance to start the year. A review of insurance policies shows that $1,600 of unexpired insurance remains at year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. b. Prepaid Insurance. The Prepaid Insurance account has a $7,290 debit balance at the start of the year. A review of insurance policies shows $1,600 of insurance has expired by year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. c. Prepaid Rent. On September 1 of the current year, the company prepaid $40,800 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $40,800. Prepaid Rent Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2.

For each separate case below, follow the three-step process for adjusting the prepald asset account at Deceml Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $6,100 debit balance to start the year. A review of insurance policies shows that $1,600 of unexpired insurance remains at year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. b. Prepaid Insurance. The Prepaid Insurance account has a $7,290 debit balance at the start of the year. A review of insurance policies shows $1,600 of insurance has expired by year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. c. Prepaid Rent. On September 1 of the current year, the company prepaid $40,800 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $40,800. Prepaid Rent Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2.

Century 21 Accounting General Journal
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter15: Preparing Adjusting Entries And A Trial Balance
Section: Chapter Questions
Problem 1MP
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For each separate case below, follow the three-step process for adjusting the prepald asset account at Deceml Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $6,100 debit balance to start the year. A review of insurance policies shows that $1,600 of unexpired insurance remains at year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. b. Prepaid Insurance. The Prepaid Insurance account has a $7,290 debit balance at the start of the year. A review of insurance policies shows $1,600 of insurance has expired by year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. c. Prepaid Rent. On September 1 of the current year, the company prepaid $40,800 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $40,800. Prepaid Rent Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2.
Transcribed Image Text:For each separate case below, follow the three-step process for adjusting the prepald asset account at Deceml Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $6,100 debit balance to start the year. A review of insurance policies shows that $1,600 of unexpired insurance remains at year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. b. Prepaid Insurance. The Prepaid Insurance account has a $7,290 debit balance at the start of the year. A review of insurance policies shows $1,600 of insurance has expired by year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. c. Prepaid Rent. On September 1 of the current year, the company prepaid $40,800 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $40,800. Prepaid Rent Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2.
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