Respuesta :
PART A
Answer:
Insurance expense debit for 3,800
Insurance prepaid credit for 3,800
Explanation:
a.- Prepaid Insurance. The Prepaid Insurance account has a $4,700 debit balance to start the year. A re- view of insurance policies and payments shows that $900 of unexpired insurance remains at year-end.
Step 1: Currently equals to $4,700
Step 2: It should equal $900
In this Case: It is giving us the begining balance, and then it proceeds to tell us the ammount unexpired, which means the ending balance. So the diference will be the adjuting entry
Step 3: $4700 - $900 = $3,800
insurance expense debit for 3,800
insurance prepaid credit for 3,800
PART B
Answer:
insurance expense 1040 debit
prepaid insurance 1040credit
Explanation:
b.- Prepaid Insurance. The Prepaid Insurance account has a $5,890 debit balance at the start of the year. A review of insurance policies and payments shows $1,040 of insurance has expired by year-end.
Step 1: Curently equals to $5,890
Step 2: 5,890 - 1,040 expired portion = 4,850 unexpired portion
The blaance should be 4,850
In this Case: It is giving us the begining balance, and then it proceeds to tell us the ammount expired, which means the adjusting entry. So the diference will be the ending balance
Step 3
The adjusting entry must be made for 1,040 which is the expired portion
insurance expense 1040 debit
prepaid insurance 1040credit
PART C
Answer:
rent expense 4,000 debit
prepaid rent 4,000 credit
Explanation:
C.- PrepaidRent. On September 1 of the current year, the company prepaid $24,000 for 2 years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $24,000.
Step 1 Current balance is 24,000
In this Case: It is giving us the begining balance, and then it proceeds to tell us information about the contract, which means we are going to work to get the expired portion and with that calculate the ending balance like on part B
Step 2 We are at December 31th the expired portion will be 4 months (September, October, November and December) so:
24,000
----------------------------- x 4 months expired = 4,000 expired portion
24 month of contract
24,000 - 4,000 = 20,000
begining - expired = ending AKA "unexpired"
The balance should be equal to 20,000
Step 3: the adjusting entry should be done for 4,000 which is the expired portion of the rent.
rent expense 4,000 debit
prepaid rent 4,000 credit
Adjusting Journal Entries at December 31:
a. Debit Insurance Expense $3,800
Credit Prepaid Insurance $3,800
To record Insurance Expense for the year.
b. Debit Insurance Expense $1,040
Credit Prepaid Insurance $1,040
To record Insurance Expense for the year.
c. Debit Rent Expense $4,000
Credit Prepaid Rent $4,000
To record Rent Expense for the year.
Data Analysis and Calculations:
a. Prepaid Insurance.
Steps:
1. Balance at beginning $4,700 debit
2. Balance at end $900
3. Insurance Expense = $3,800 ($4,700 - $900)
Insurance Expense $3,800 Prepaid Insurance $3,800
b. Prepaid Insurance.
Steps:
1. Balance at beginning $5,890
2. Balance at end = $4,850 ($5,890 - $1,040)
3. Insurance Expense $1,040
Insurance Expense $1,040 Prepaid Insurance $1,040
C. Prepaid Rent
Steps:
1. Prepaid Rent $24,000
2. Balance at end = $20,000 ($24,000 - $4,000)
3. Rent Expense = $4,000 ($24,000 x 4/24)
Rent Expense $4,000 Prepaid Rent $4,000
Learn more about recording adjusting entries at https://brainly.com/question/13035559