Concept explainers
Journal entries are the transactions of quantitative nature that are made in the books of accounts to record every transaction that happens in the business in the chronological order.
Accounting rules for journal entries:
- To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
Prepaid insurance:
Prepaid insurance is the amount of insurance paid in advance which is unexpired.
Unexpired insurance:
Unexpired insurance is that part of insurance amount which is paid in advance and is not yet expired. It is classified as a prepaid insurance on assets side of the balance sheet.
Supplies:
Supplies are units to be used in the business operations. Hence, supplies on hand constitute the assets of the business which are not yet utilized and similarly supplies expense constitutes supplies utilized in the business.
a.
To prepare: journal entries:
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FINANCIAL ACCT.FUND.(LOOSELEAF)
- JOURNAL ENTRIES (ACCRUED INTEREST RECEIVABLE) At the end of the year, the following interest is earned, but not yet received. Record the adjusting entry in a general journal. Interest on 4,000, 90-day, 7% note (for 15 days) 11.67 Interest on 7,000, 60-day, 6% note (for 18 days) 21.00 32.67arrow_forwardCurrent Attempt in Progress The ledger of Cullumber Company at the end of the current year shows Accounts Receivable $68,000, Credit Sales $810,000, and Sales Returns and Allowances $38,000. Prepare journal entries for each separate scenario below. If Cullumber Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Cullumber Company determines that Matisse's $500 balance is uncollectible. (a) If Allowance for Doubtful Accounts has a credit balance of $900 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable. (b) If Allowance for Doubtful Accounts has a debit balance of $490 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 7% of accounts receivable. (c) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles…arrow_forwardA company has the following December 31 year-end unadjusted balances: Allowance for Sales Discounts, $0; and Accounts Receivable, $11,200. Of the $11,200 of receivables, $2,600 are within a 3% discount period, and the company expects buyers to take $78 in future discounts arising from this period's sales. Required: 1. Prepare the December 31 year-end adjusting journal entry for future sales discounts.arrow_forward
- Adjusting 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_forwardAdjusting entries for prepaid insurance The balance in the prepaid insurance account, before adjustment at the end of the year, is $21,910. 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 $16,650. If an amount box does not require an entry, leave it blank. b. The amount of unexpired insurance applicable to future periods is $5,260. If an amount box does not require an entry, leave it blank. Σ .arrow_forwardJournalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $18,330 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: Aging Class (Numberof Days Past Due) Receivables Balanceon December 31 Estimated Percent ofUncollectible Accounts 0-30 days $293,000 1 % 31-60 days 110,000 8 61-90 days 35,000 20 91-120 days 13,000 55 More than 120 days 18,000 80 Total receivables $469,000arrow_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_forwardSmokey Company purchases a one-year insurance policy on July 1 for $11,568. The adjusting entry on December 31 is a.debit Insurance Expense, $11,568 and credit Prepaid Insurance, $11,568 b.debit Insurance Expense, $5,784 and credit Prepaid Insurance, $5,784 c.debit Prepaid Insurance, $10,604 and credit Cash, $10,604 d.debit Insurance Expense, $964 and credit Prepaid Insurance, $11,568arrow_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
- Adjusting entries for prepaid insurance Instructions Chart of Accounts Journal Instructions The balance in the prepaid insurance account, before adjustment at the end of the year, is $18,135. 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 $15,480; (b) the amount of unexpired insurance applicable to future periods is $2,655. 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. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Equipment 17…arrow_forwardOn December 1, Daw Company accepts a $46,000, 45-day, 9% 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. (Use 360 days a year.) View transaction list Journal entry worksheet Record the year-end adjustment related to this note, if any. Note: Enter debits before credits. Date General Journal Debit December 31 Clear entry Record entry Credit View general journalarrow_forwardAdjusting entries for prepaid insurance The balance in the prepaid insurance account, before adjustment at the end of the year, is $22,500. 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 $18,000. If an amount box does not require an entry, leave it blank. 88 b. The amount of unexpired insurance applicable to future periods is $4,500. If an amount box does not require an entry, leave it blank.arrow_forward
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