Question

i need hell with entry 2. also can you please check if entry 1 and 3 are correct?

A company has a fiscal year-end of December 31: (1) on October 1, $29,000 was paid for a one-year fire insurance policy, (2) on June 30 the company advanced its chief financial officer $27,000; principal and interest at 5% on the note are due in one year, and (3) equipment costing $77,000 was purchased at the beginning of the year for cash. Prepare journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

TR	General Journal					Debit	Credit
1)	Insurance expense					7250
	prepaid insurance						7,250
	(29000/12)*3
2)	interest receivable					675
	interest income						675
	(27000*5%*6/12)
3)	Depreciation expense					15,400
	Accumulated depreciation-Equipment						15,400
	( I am assuming the depreciation figure for the year by you is correct
	as I cannot see any information related to it in the question)