Question

Problem 7-5 Prepaid Insurance and the Monthly Prepaid Insurance Adjusting Entry On September 1, 2019, Amy's Floral Shop, Inc. paid cash for the following two insurance policies Insurance Policy #1 Auto and Truck Type of insurance coverage Starting date of the insurance coverage. September 1, 2019 Period of time coverage is for..3 months Total cost of coverage paid in advance... $525 Insurance Policy #2 Type of insurance coverage.. Business Liability Starting date of the insurance coverage .. Sseptember 1, 2019 Period of time coverage is for.......4 months Total cost of coverage paid in advance.$1 $1,400 The company has the accounting policy that all prepaid assets are initially recorded in asset accounts The following is a partial list of the accounts in Amy's General Ledger. These are the only accounts you need for this problem. D Cash Prepaid Insurance (asset account) D Insurance Expense Remove and use the forms on Pgs 221 and 222 to complete this problem. Requirement 1 Prepare the General Journal entry to record the September 1 cash payment made to purchase the two insurance policies. Note that there is only one General Ledger account for Prepaid Insurance, and that the amount of Prepaid Insurance related to both insurance policies is kept in that one account. Requirement 2 Fill-in the amounts on the Auto and Truck Prepaid Insurance timeline. The boxes above the timeline show the amount of Auto and Truck Prepaid Insurance still remaining at various dates during the three month period. The boxes below the timeline show the amount of Auto and Truck Prepaid Insurance that expires (is used-up) during each of the three months. Requirement 3 Fill-in the amounts on the Business Liability Prepaid Insurance timeline. The boxes above the timeline show the amount of Business Liability Prepaid Insurance still remaining at various dates during the four month period. The boxes below the timeline show the amount of Business Liability Prepaid Insurance that expires (is used-up) during each of the four months. (Problem 7-5 continued on the next page)

Answer 1

Roobkm75 ngusene Roliais lake Auto and 175 mon th SapLem bcEobe NoVembn emend ..3 nesLipblity month month moth 3.-1 month 4 lisLmeni out CI ate 348 25 To 2

am2 2 in ante tence Calane on oct Balance on gePt 30 txpisea duiing ockoben Balance on 31 815 115 Total 5 25 Problem 6 Lle 200 620 0

Revuite me da mound 128D 1280 Total 3940 3 bi ges Payable udage) due) 384o couns title Debit Cedib 2110 3δυο | 384 D 5950 Payment made of 4595040,11 beGrgf Rid