eBook Show Me How E Calculator Exercise 3-50 Prepayment of Expenses DM Inc. made

Question

eBook Show Me How E Calculator Exercise 3-50 Prepayment of Expenses DM Inc. made the following prepayments for expense items during 2019: a. Prepaid building rent for 1 year on April 1 by paying $6,600. Prepaid rent was debited for the amount paid b. Prepaid 12 months insurance on October 1 by paying $4,200. Prepaid insurance was debited. C. Purchased $5,250 of office supplies on October 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 31, 2019. d. Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to Required: 1. Prepare journal entries to record the payment of cash for each transaction April1 Prepaid Rent prepaid repairs and maintenance. Cash (Record prepayment for rent) Oct1 Prepald Insurance Cash (Record the prepayment of insurance) Oct. 15 Supplies Cash (Record the purchase of supplies) Nov. 1 Prepaid Repairs and Maintenance Cash Record prepayment of repairs and maintenance)

Explanation / Answer

Journal entries to record payment of cash for each transactions: DR IN $ CR IN $ 1-Apr Prepaid rent Dr. 6600 Cash Account Cr. 6600 (For recording prepayment of rent) 1-Oct Prepaid Insurance Dr. 4200 Cash Account Cr. 4200 (For recording prepayment of insurance) 15-Oct Office Supplies Dr. 5250 Cash Account Cr. 5250 (For recording purchase of supplies) 1-Nov Prepaid repairs and Maintenance Dr. 600 Cash Account Cr. 600 (For recording prepayment of repairs and maintenance)

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