Homework: Week 3 - Chapter 03 problems score: 0 of 1 pt P3A-38A (similar to) 3 o

Question

Homework: Week 3 - Chapter 03 problems score: 0 of 1 pt P3A-38A (similar to) 3 of 5 (2 complete) HW Score: 21.82%, 1.090 Question Help Friendly Faces Packn Mail completed the following transactions during 2016 (Click the icon to view the transactions.) Read the requirements Requirement 1. Journalize the transactions assuming that Friendly Faces debits an asset account for prepaid expenses and credits a liability account for unearned revenues. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Nov. 1: Paid $5,000 store rent covering the five-month period ending March 31, 2017 Debit Credit Date Accounts and Explanation Nov. 1

Explanation / Answer

1) Date Accounts and Explanation Debit Credit Nov 1 Prepaid Rent $5,000.00 Cash $5,000.00 To record rent paid in advance. Nov 1 Prepaid Insurance $4,800.00 Cash $4,800.00 To record insurance paid in advance. Dec 1 Cash $4,800.00 Unearned Revenue $4,800.00 To record cash collected for future services Dec 1 Cash $7,500.00 Unearned Revenue $7,500.00 To record cash collected for future services 2) Date Accounts and Explanation Debit Credit Dec 31 Rent Expense ($5000/5 x 2 months) $2,000.00 Prepaid Rent $2,000.00 To record rent expense Dec 31 Insurance Expenses ($4800/4 x 2months) $2,400.00 Prepaid Insurance $2,400.00 To record insurance expense Dec 31 Unearned Revenue $1,600.00 Service Revenue $1,600.00 To record service revenue earned that was collected in advance Dec 31 Unearned Revenue $2,500.00 Service Revenue $2,500.00 To record service revenue earned that was collected in advance

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