FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Chapter 3, Problem 24ME
1.
To determine
Prepare adjusting entry and
2.
To determine
Prepare adjusting entry and journal entry for supplies.
3.
To determine
Prepare adjusting entry and journal entry for depreciation.
4.
To determine
Prepare adjusting entry and journal entry for rent.
5.
To determine
Prepare adjusting entry and journal entry for accrued salaries.
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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?
For each of the following independent situations, give the journal entries to adjust and correct the books at the end of 2020. In all situations you are to assume that the company in question closes its books on December 31 of each year and that reversing entries have been properly recorded where needed except as indicated.
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                                                        ADJUSTING ENTRIES
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The trial balance before adjustments on December 31, 2020 shows Prepaid Insurance at $1,500. The insurance coverage consists of one policy that expires on April 1 each year. The renewal premium paid on April 1 for one year in advance was identical to the premium paid the previous year.
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Rent on unused space is received on May 1 each year for one year in advance. The Unearned Rent account is reported at $1,720 on the trial balance before adjustments on December 31, 2020. The rent received on May 1, 2020, was 10% higher than the rent received on May l of the previous year.…
For each of the following independent situations, give the journal entries to adjust and correct the books at the end of 2020. In all situations you are to assume that the company in question closes its books on December 31 of each year and that reversing entries have been properly recorded where needed except as indicated.
Â
Â
                                                        ADJUSTING ENTRIES
Â
Â
The trial balance before adjustments on December 31, 2020 shows Prepaid Insurance at $1,500. The insurance coverage consists of one policy that expires on April 1 each year. The renewal premium paid on April 1 for one year in advance was identical to the premium paid the previous year.
Â
Rent on unused space is received on May 1 each year for one year in advance. The Unearned Rent account is reported at $1,720 on the trial balance before adjustments on December 31, 2020. The rent received on May 1, 2020, was 10% higher than the rent received on May l of the previous year.…
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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- Prepare the adjusting entries on December 31, 2019, the end of the annual accounting period,on the following independent data. Show your computations after each entry.1. The Insurance Expense account had a debit balance on December 31, 2019 of P 36,000 representing premium for a 2-year fire insurance policy effective October 1, 2019.2. Rent Income was credited for P 18,000 on November 1, 2019 representing nine months rent collected in advance.3. Equipment per general ledger on December 31, 2019 shows a balance of P 372,000. Equipment acquired during the year was P 52,000 on April 1, 2019. All equipment is to be depreciated at the rate of 25% per annum.4. As of December 31, 2019, commissions already earned but not yet collected amounted to P 48,000.5. Office Supplies costing P 9,000 bought during the period was debited to the Office Supplies account. Of the amount, P 5,000 were consumed during the year.6. Unearned Service Fees account showed a credit balance of P 80,000 pergeneral…arrow_forwardABC Inc. purchased a 12-month insurance policy on January 1, 2019 for OMR 2400. At June 30, 2019, The Adjusting Entry should be: Select one: Oa. Debit to Insurance Expense, OMR 1200; Credit to Prepaid Insurance for OMR1200 O b.None of the answers are correct Oc Debit to Insurance Expense. OMR 2400; Credit to Prepaid Insurance for OMR 2400 O d. Debit to Prepaid Insurance, OMR 1400; Credit to Insurance Expense for OMR 1400 Oe. Debit to Prepaid Insurance, OMR 2400: Credit to Cash for OMR 2400 Clear my choicearrow_forwardAdjusting entries for prepaid insuranceThe prepaid insurance account had a balance of $3,000 at the beginningof the year. The account was debited for $32,500 for premiums onpolicies purchased during the year. journalize the adjusting entry required under each of the following alternatives for determining theamount of the adjustment: (A) the amount of unexpired insuranceapplicable to future periods is $4,800; (B) the amount of insuranceexpired during the year is $30,700.arrow_forward
- 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 abovearrow_forwardOn the 1 September 2019 Jacobson Limited paid insurance premiums of $18,000 for 12 months to 31 August 2020. The entire amount was recorded as an insurance expense when the amount was paid. No adjustments have been made to the accounting records since the payment was made, it is now 30 June 2020 (balance date) process the necessary adjusting journal for the insurance premium.arrow_forwardAdjusting Entries for Prepaid Insurance The balance in the prepaid insurance account, before adjustment at the end of the year, is $27,000. Journalize the 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 $20,250.         b.  The amount of unexpired insurance applicable to future periods is $6,750.arrow_forward
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