Question

Record the journal entries.

1. During 2017 there were four notes payable outstanding (the three indicated below and the one repaid on December 22). Interest for two of these notes (SnapCut and WestBestVideo) is paid at maturity; interest on the Wells Fargo note is paid semiannually. Proper accruals of the interest related SnapCut and WestBestVideo were done as of November 30, 2017. Interest for December 2017 needs to be recorded.

         Your assistant calculated interest for December 2017 below:

SnapCut Inc., 6%, 6 months, due Apr. 30, 2018	7,000 x 0.085 x (1/12) =	50
WestBestVideo, 8%, 6 months, due Apr. 30, 2018	2,000 x 0.08 x (1/12) =	13
Wells Fargo, 5%, 5 years, due Dec. 1, 2022	30,000 x 0.05 x (1/12) =	125

2. Insurance expense for December 2017 needs to be recorded (see item #6).
3. item 6
4. FCM recorded the purchase of a $1,800 insurance policy to a real account on June 30, 2017, for coverage from July 1 through December 31, 2017. The company correctly recorded monthly adjusting entries related to the insurance through November 30^th.FCM purchased a new12-month policy on December 31 for $2,920 cash.

Answer 1

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Please find below the answer
Statementshowing Computations
Paticulars	Debit	Credit
a)Snapcut
Interest expense Dr	35.00
To Interest payable		35.00
(7000*6%*1/12)
b) West best Video
Interest expense Dr	13.33
To Interest payable		13.33
(2000*8%*1/12)
c)Wells Fargo
Interest expense Dr	125.00
To Interest payable		125.00
(30000*5%*1/12)
d)
Insurance expense Dr	300.00
To prepaid insurance		300.00
(1800/6)
e)
Prepaid insuranceDr	2,920.00
To Cash		2,920.00