1. A three-year fire insurance policy was purchased on July 1, 2018, for $9,360.
ID: 2398362 • Letter: 1
Question
1. A three-year fire insurance policy was purchased on July 1, 2018, for $9,360. The company debited insurance expense for the entire amount. 2. Depreciation on equipment totaled $10,250 for the year. 3. Employee salaries of $12,500 for the month of December will be paid in early January 2019. 4. On November 1, 2018, the company borrowed $110,000 from a bank. The note requires principal and interest at 12% to be paid on April 30, 2019 5. On December 1, 2018, the company received $3,200 in cash from another company that is renting office space in Falwell's building. The payment, representing rent for December and January, was credited to deferred rent revenue.Explanation / Answer
No. Journal entry. Debit Credit
1. Prepaid insurance A/C 9,360
To insurance expense A/C. 9,360
2. Depreciation expense A/c. 10,250
To accumulated depreciation A/c . 10,250
3. Salaries expense A/c. 12,500
To salaries payable A/c. 12,500
4. Interest expense A/c . 2,200
To interest payable A/c. 2,200
5. Unearned rent revenue A/c . 1,600
To rent revenue A/c . 1,600
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