On August 1, 2019, a firm purchased a 1-year insurance policy for $6,900 and paid the...

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Question

Answer 1

Answer #1

(1) 1 year Insurance policy from $6900 on August 1 2019

Expense associated for the year ending December 31 2019 = $6900/12 month * 5 month

= $2875

(2) 10% Note for $2400

Accrued Interest on 30 June = $2400 * 10% * 3/12 = $60

(3) 6% Note for $40000

Accrued Interest on December 31 = $40000 * 6% * 4/12 = $800

(4) Account in Trial Balance = $830 Debit

Adjustment section = $460 Debit

Account balance in adjustment = $830 + $460 = $1290 Debit

Answer 2

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