Question

Required information (The following information applies to the questions displayed below.) A+T Williamson Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: a. A two-year insurance premium of $4,080 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1. b. At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents. Shipping supplies on hand, January 1 of the current year Purchases of shipping supplies during the current year Shipping supplies on hand, counted on December 31 of the current year $ 18,000 62,500 16,500 Required: 1. Record the adjusting entry for insurance at December 31 of the current year. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting journal entry for insurance premium of $4,080 on December 31 of the current year. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

A two year insurance premium of $4,080 was paid on October 1 of the current year.

Insurance expense for three months of the current year = 4,080 x 3/24

= $510

Following adjusting entry will be made on December 31 of the current year to record insurance expense:

Journal

Date	Account title	Debit	Credit
December 31	Insurance expense	510
	Prepaid insurance		510
	(To record insurance expense)

b)

Shipping supplies, beginning = $18,000

Purchases of shipping supplies = $62,500

Shipping supplies, ending = $16,500

Shipping expense = Shipping supplies, beginning + Purchases of shipping supplies - Shipping supplies, ending

= 18,000 + 62,500 - 16,500

= $64,000

Journal

Date	Account title	Debit	Credit
December 31	Shipping expense	64,000
	Shipping supplies		64,000
	(To record shipping expense)

Thank you