Question

1. Pina Colada Corp. began operations on January 1, 2020. Its fiscal year end is December 31. Pina has decided that prepaid costs are debited to an asset account when paid, and all revenues are credited to revenue when the cash is received. During 2020, the following transactions occurred. On January 1, 2020, Pina bought office supplies for $3,940 cash. A physical count at December 31, 2020 revealed $1,820 of supplies still on hand 2. Pina bought a $5,760, one-year insurance policy for cash on August 1, 2020. The policy came into effect on this date, On November 15, 2020, Pina received a $1,140 advance cash payment from a client for services to be provided in the future. As at December 31, 2020, one third of these services had not been performed. On December 1, 2020, Pina rented out excess office space for a six-month period starting on this date, and received a $1,060 cheque for the first and last month's rent. 3. 4. (a) For each of the above transactions, prepare the journal entry for the original transaction and any adjusting entry required at December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter for the amounts.) Debit Credit No. Date Account Titles and Explanation 1. 2.

Answer 1

1	01-Jan	Supplies	3,940.00
		Cash		3,940.00
	31-Dec	Supplies Expense	2,120.00
		Supplies		2,120.00
2	01-Aug	Prepaid Insurance	5,760.00
		Cash		5,760.00
	31-Dec	Insurance Expense	2,400.00
		Prepaid Insurance		2,400.00
3	15-Nov	Cash	1,140.00
		Service Revenue		1,140.00
	31-Dec	Service Revenue	380.00
		Unearned Revenue		380.00
4	01-Dec	Cash	1,060.00
		Rent Revenue		1,060.00
	31-Dec	Rent Revenue	883.33
		Unearned Revenue		883.33