Question

C. The company's income tax rate is 20%. After making all the above adjustments, SPC's net income before taxes $10,000. No income tax has been paid or recorded. Record at the adjusting entry for income tax and 20% on that income before taxes of $10,000.

Fnewconnect.mheducation.com%252F#/activity/questi apter 4 HW 0 Saved wy 1. in the first account field.) 2 nts a. Prepaid Insurance shows a balance of zero at September 30, but Insurance Expense shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy purchased on September 1 of the current year. b. On August 31 of this year, Cash was debited and Service Revenue was credited for $1,500. The S1,500 related to fees for a three- month period beginning September 1 of the current year. c. The company's income tax rate is 20%. After making the above adjustments, SPC's net income before tax is $10,000. No income tax has been paid or recorded. eBook View transaction list Print Journal entry worksheet eferences Record the adjusting entry for income tax of 20% on net income before tax of $10,000 Note: Enter debits before credits Transaction General Journal Debit Credit с Record entry Clear entry View general journal

Answer 1

Adjusting entries
S.no.	Accounts title and explanation			Debit $	Credit $
a.	Prepaid insurance (2340*35/36)			2275
	Insurance expense					2275
	(for unexpired insurance transferred to Prepaid insurance)
b.	Service revenue (1500*2/3)			1000
	Unearned service revenue				1000
	(for advance revenue received)
c.	Income tax expenses (10,000*20%)		2000
	Income tax payable				2000
	(for income tax expense due)