FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Chapter 3, Problem 10Q
To determine
Prepare adjusting entry that should be made on January 31.
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(1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31.
(2) Prepare the entry required on the note's maturity date assuming it is honored. (Use 360 days a year.)
Prepare a General Journal entry for the following transaction:
On December 17, On Your Mark paid $1,500 to Keystone Insurance Company toward the premium for
a six-month insurance policy, check No. 1001.
On 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?
Chapter 3 Solutions
FINANCIAL ACCOUNTING
Ch. 3 - Prob. 1MCCh. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - Prob. 5MCCh. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Prob. 3QCh. 3 - Prob. 4QCh. 3 - Prob. 5Q
Ch. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Prob. 8QCh. 3 - Prob. 9QCh. 3 - Prob. 10QCh. 3 - Prob. 11QCh. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 15QCh. 3 - Prob. 16QCh. 3 - Prob. 17QCh. 3 - Prob. 18QCh. 3 - Prob. 19QCh. 3 - Prob. 20QCh. 3 - Prob. 21MECh. 3 - Prob. 22MECh. 3 - Prob. 23MECh. 3 - Prob. 24MECh. 3 - Prob. 25MECh. 3 - Prob. 26MECh. 3 - Prob. 27MECh. 3 - Prob. 28MECh. 3 - Prob. 29MECh. 3 - Prob. 30MECh. 3 - Prob. 31ECh. 3 - Prob. 32ECh. 3 - Prob. 33ECh. 3 - Prob. 34ECh. 3 - Prob. 35ECh. 3 - Prob. 36ECh. 3 - Prob. 37ECh. 3 - Prob. 38ECh. 3 - Prob. 39ECh. 3 - Prob. 40PCh. 3 - Prob. 41PCh. 3 - Prob. 42PCh. 3 - Prob. 43PCh. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49PCh. 3 - Prob. 50PCh. 3 - Prob. 51PCh. 3 - Prob. 52PCh. 3 - Prob. 53PCh. 3 - Prob. 54PCh. 3 - Prob. 55CPCh. 3 - Prob. 56CPCh. 3 - Prob. 57CPCh. 3 - Prob. 58CP
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- The company determines that the interest expense on a note payable for the period ending December 31 is $630. This amount is payable on January 1. Prepare the journal entries required on December 31 and January 1.arrow_forwardOn July 1, Orcas Lab issued a $100,000, 12%, 8-month note. Interest is payable at maturity. What is the amount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a) December 31? (b) September 30?arrow_forwardOn December 1, Daw Co. accepts a $10,000, 45-day, 6% note from a customer. (1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31. (2) Prepare the entry required on the note’s maturity date assuming it is honored.arrow_forward
- The balance in the prepaid insurance account, before adjustment at the end of the year, is $18,565. Journalize the March 31 adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $14,135; (b) the amount of unexpired insurance applicable to future periods is $4,430. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.arrow_forwardA company purchased a certificate of deposit (a short-term investment that pays interest to the purchaser when it matures) on March 1 that will pay $120 of interest 3 months from that date when it matures. On March 31, which of the following adjusting journal entries would be made? Account Debit Credit A. Interest receivable 120 Interest revenue 120 B. Interest receivable 40 Interest revenue 40 C. Interest receivable 120 Unearned revenue 120 D. No entry is recorded on March 31. Group of answer choices A. B. C. D.arrow_forwardon january 1, prepaid insurance was debited for 1,896 related to the cost of a two-year premium, with coverage beginning immediately. how should this be adjusted for on january 31 before financial statements are prepared for the current montharrow_forward
- Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:a. Product warranty cost, $26,800.b. Interest on the 19 remaining notes owed to Gallardo Co.arrow_forwardIn the journal provided, prepare entries for the following (assume a calendar-year accounting period).Dec. 1 Received a three-month, 15 percent note receivable for $3,920 from acustomer as an extension of his past-due account.31 Made the year-end adjustment for accrued interest.Mar. 1 Received full payment on the note.arrow_forwardThe prepaid insurance account had a balance of $7,155 at the beginning of the year. The account was debited for $22,025 for premiums on policies purchased during the year, ending on March 31. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of unexpired insurance applicable to future periods is $8,765; (b) the amount of insurance expired during the year is $20,415. Refer to the Chart of Accounts for exact wording of account titles.arrow_forward
- The balance in the Prepaid Insurance account before adjustment at the end of the year is P7,200 which represents twelve months insurance purchased on December 1. What is the adjusting entry required on Dec. 31, 2021? debit Prepaid Insurance, P600; credit Insurance Expense, P600. debit Insurance Expense, P600; credit Prepaid Insurance, P600. debit Insurance Expense, P600; credit Insurance Payable, P600. debit Insurance Expense, P6,600; credit Prepaid Insurance, P6,600. debit Prepaid Insurance, P7,200; credit Insurance Expense, P7,200.arrow_forwardOn July 1, Orcas Lab issued a $100,000, 12%, eight-month note. Interest is payable at maturity. What is theamount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a)December 31? (b) September 30?arrow_forwardInstructions Mar. Purchased merchandise on account from Kirkwood Co., $372,000, terms n/30. 1 31 Issued a 30-day, 4% note for $372,000 to Kirkwood Co., on account. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. Borrowed $150,000 from Triple Creek Bank, issuing a 45-day, 8% note. 1 Jul. 1. Purchased tools by issuing a $276,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%. 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6.5% note for $150,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co. the amount due on the note of July 1. Dec. Purchased equipment from Greenwood Co. for $540,000, paying $108,000 cash and issuing a series of ten 4% notes for $43,200 each, coming due at 30-day intervals. 22 Settled a product liability lawsuit with a customer for $309,500, payable…arrow_forward
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