Question

A company has a fiscal year-end of December 31: (1) on October 1, $13,000 was paid for a one-year fire insurance policy: (2) on June 30 the company advanced its chief financial officer $11,000; principal and interest at 5% on the note are due in one year; and (3) equipment costing $61,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $12,200 per year. Prepare the necessary adjusting entries at December 31 for each of the above items. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is complete but not entirely correct. No Transaction General Journal Credit Debit 1,083 Interest expense Prepaid insurance 1,083 275 Accrued liabilities Interest revenue 275 12,200 Depreciation expense Accumulated depreciation 12,200

Answer 1

solution 'No 1 Transcation | General Journal Debit Gedet 1 1 3250 Insurance expenses [ 13000/12 x 3] prepaid Insurance 1 [ Prepaid insurance expired for 3 months 3250 Interest Accrued Ľ 11000 x 59%86/12] Interest revenue [ Interest on loan became accrued for 6 months Depreciation expenses – equipment Accumulated Depreceation - 3 3 12200 12200 equipment [Depreciation on equipment during ' the Year