On July 1, 2015, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18

Question

On July 1, 2015, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18 months from July 2015 through December 2016. What adjusting entry should Charlie Co. record on December 31, 2015. Option a. Option b. Option c. Option d. Allen Inc. took out a 1-year, 8%, $100,000 loan on March 31, 2015. Interest is due upon maturity of the loan. The loan and interest must be paid back on March 31, 2016. As of December 31, 2015, what amount, if any, should Allen Inc. report for interest payable? $6,000. $2,000. $0. $8,000. Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries? Option a. Option b. Option c. Option d.

Explanation / Answer

1 FOR 18 MONTHS 18000

6 MONTHS 6000

JOURAL ENTRY IS RENT EXPENSE DR 6000

TO PREPAID RENT 6000

2) INTEREST AMOUNT IS 8% OF 100000 8000

INTEREST PAYABLE IS FOR 9 MONTHS FOR THAT YEAR 8000*9/12 6000

3) INSURANCE EXPENSE DR 2450

TO PREPAID INSURANCE 2450

BECAUSE ON THAT DATE PREPAID INSURANCE IS ONLY FOR 7 MONTHS SO 4200*7/12

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.