prepare the adjusting entry for #5 rial balance as of January 31,2018 Pastina Co
ID: 2342616 • Letter: P
Question
prepare the adjusting entry for #5
rial balance as of January 31,2018 Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal P2-3 Adjusting entries year-end is December 31. The unadjusted trial balance as of December 31, 2018, appears below Account Titte Debits Credits 30,000 40,000 1,500 60,000 20,000 Accounts recelvable Supplies Inventory Note receivable Interest recelvable Prepaid rent 2,000 Prepaid insurance Office equipment Accumulated depreciation-office equipment Accounts payable Salaries and wages payable Note payable interest payable Deferred revenue Common stock Retained earnings Sales revenue Interest revenue 80,000 30,000 31,000 50,000 60,000 24.500 148,000 Cost of goods sold Salaries and wages expense Rent expense Depreciation expense 70,000 18,900 11,000 Interest expense Supplies expense Insurance expense Advertising expense 1,100 5,000 3,000 343,500 Totals 343,500 Information necessary to prepare the year-end adjusting entries appears below. I. Depreciation on the office equipment for the year is $10,000. 2. Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through 3. On October 1, 2018, Pastina borrowed $50.000 from a local bank and signed a note. The note requires interest 4. On March 1, 2018, the company lent a supplier $20,000 and a note was signed requiring principal and interest 5. On April 1, 2018, the company paid an insurance company $6,000 for a two-year fire insurance policy. The the end of the month. Salaries and wages earned from December 16 through December 31, 2018, were $1.500. to be paid annually on September 30 at 12%. The principal is due in 10 years. at 8% to be paid on February 28, 2019. entire $6,000 was debited to insurance expense. 6. $800 of supplies remained on hand at December 31, 2018. 7. A customer paid Pastina $2,000 in December for 1.500 pounds of spaghetti to be delivered in January 2019. Pastina credited sales revenue. 8. On December 1,2018. $2.000 rent was paid to the owner of the building. The payment represented rent for December 2018 and January 2019 at $1,000 per month.Explanation / Answer
Debit Prepaid Insurance $ 3750
Credit Insurance Expense $ 3750
Subtract the different between April 1st and December 31st
24 months- 9 months= 15 months
Since we are trying to figure out how much insurance expense has occured we need to do the length of the month
6,000 x the number of periods left 15/24= 3750
Please mark the answer as helpful, Thanks !!
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