Question

TWO (50% estimated time 20 minutes) Required Part 1: Journal Entries (make sure y Journal Entries make sure you add your analysis in parentheses: A+, L-, etc.) Provide appropriate adjusting journal entries for eac e s prate adjustingimust ts that each can reflected accurately in the 2018 financial stateme with a December rately in the 2018 financial statements under accrual accounting. Assume that Sutter operates a December 31 year-end and there have been adjusting entries made during the year. d 20o e Cogh Sutter arranged a property insurance policy to protect its corporate headquarters building from fire, flood thriftste. On ne 2018 Sutter pad s 24,000 for a two-year policy. The policy started on June 1, and the entire amount was booked to the property insurance expense A24.000 account on June 1. Ac Rec 16. b. Sutter provided and fulfilled) consalting services during the month of December to a new client and billed the client $16,000 for the work. As of December 31, 2018, the client had not Soru Re p aid Sutter. c. Sutter purchased $22,000 in inventory during 2018 (all for cash). Per a physical count, the beginning balance of inventory was $2,000, and the enxling balance was $1.600. 9 5 ,00 d. Sutter borrowed $50,000 on April 1. Sutter signed a note stating they would pay interest of Cash 50,00 6% per year. They will pay the first amount of interest on March 31, 2019 notes pay. 50,000 Date Account Dr. Cr. Dec 31 Prepaid Expense (Et SE-) 12,000 prepaid insurance (A-) 12,00 Two 16,000 I Dec 31 lihoes Expense (E+, SE-) Wages payable (L+) le.co | Dec 31 Dec 31 6.250 Interest Expense - Interest payable (Et, SE-) (27) .250

pls:)

Answer 1

Solution

Date Account Debit(in $) Credit(in $)

31-12-18 Prepaid Insurance A/c (A+) 17000

To insurance expenses A/c (E-) 17000

31-12-18 Accounts Receivable A/c (A+) 16000

To Service revenue(R+) 16000

31-12-18 Raw materials consumed A/c (E+) 22400

To Inventory A/c (A+) 22400

31-12-18 Interest expense A/c (E+) 2250

To interest payable (L-) 2250