Question

nstructions Journal The following errors took place in journalizing and posting transactions: Journalize the entries on December 31 to correct the errors. Use two entries to correct the error described in A. (That is, record an entry to reverse the incorrect entry and a second entry to record the corre a. Insurance of $18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit wording of account titles. to Prepaid Insurance b. Dividends of $10,000 were recorded as a debit to Wages Expense and a credit to Cash. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY ournalize the entries to correct the errors. Use two entries to correct the error described in A. (That is, record an , o reverse the incorrect entry and a second entry to record the correct entry.) Refer to the Chart of Accounts for ex Iording of account titles 1 2 3 4 5 CHART OF ACCOUNTS 6 General Ledger ASSETS REVENUE 41 Service Revenue 11 Cash EXPENSES 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Equipment LIABILITIES 51 Advertising Expense 52 Automobile Expense 53 Insurance Expense 54 Rent Expense 55 Wages Expense 56 Supplies Expense 57 Utilities Expense 58 Miscellaneous Expense 21 Accounts Payable 22 Salaries Payable 23 Notes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends

Answer 1

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	Journal entry
No.	Account title and explanation	Debit $	Credit $
A. 1	Prepaid Insurance	36,000.00
	Insurance expense		18,000.00
	Cash		18,000.00
A. 2	Insurance expense	18,000.00
	Prepaid Insurance		18,000.00
B	Dividends	10,000.00
	Wages Expense		10,000.00