Question

A company has a fiscal year-end of December 31 (1) on October 1, $20,000 was paid for a one-year fire insurance policy. (2) on June 30 the company advanced its chief financial officer $18.000 principal and interest at 8% on the note are due in one year, and (3) equipment costing $68,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,600 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.) View transaction list Journal entry worksheet < 1 2 3 On October 1, $20,000 was paid for a one-year fire insurance policy Note: Enter debits before credits Transaction General Journal Debit Credit / // IH 111 III / 111 // Record entry Clear entry View general journal

Answer 1

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Naming convention is not available, can be slightly different: Solution: Trans. Credit Debit $ 5,000 $ 5,000 Journal entries Account title and explaination Insurance Expense (20000/12*3) Prepaid Insurance (To record the insurance expense) Interest Receivable (18000*8%)/12*6 Interest Revenue (To record accrual of interest revenue) Depreciation Expense Accumulated Depreciation (To record the accrual of depreciation expense) $ 720 $ 720 $ 13,600 $ 13,600