Question

Redson Inc. opened business on 1/1/2020. On 1/1/2020 Redson paid for two insurance policies effective that date. The liabilit
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Liability Policy - 72,000

Durartion-18 Months

Therefore, Monthly Insurance charge is 4,000.

Hence Prepaid Entry need to be considered as on 31st Dec'20 for 6 Months

Prepaid Insurance (Liability Policy) = 24,000

Fire damage Policy - 36,000

Duration- 24months

There,fore Monthly Insurance charge is 2,000

Hence Prepaid Entry need to be considered as on 31st Dec'20 for 12 Months

Prepaid Insurance (Fire Damage Policy) = 24,000

Balance in Prepaid Insurance Account will be 24,000 + 24,000 = 48,000 as on 31st Dec'20

Add a comment
Know the answer?
Add Answer to:
Redson Inc. opened business on 1/1/2020. On 1/1/2020 Redson paid for two insurance policies effective that...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Eve's Apples opened for business on January 1, 2021, and paid for two insurance policies effective...

    Eve's Apples opened for business on January 1, 2021, and paid for two insurance policies effective that date. The liability policy was $64,800 for 18 months, and the crop damage policy was $28,800 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2021? o o o o The following table contains financial information for Trumpeter Inc. before closing entries: Cash Supplies Prepaid Rent Salaries Expense Equipment Service Revenue Miscellaneous Expenses Dividends Accounts...

  • 3. Adam's Apples opened for business on January 1, 2019, and paid for two insurance policies...

    3. Adam's Apples opened for business on January 1, 2019, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Adam's Prepaid Insurance account as of December 31, 2019? a. $9,000 b. $18,000 c. $30,000 d. $48,000. I 5. The following financial information is from Daily Construction Company: Accounts Payable $15,000 Buildings 80,000 Cash 10,500 Accounts Receivable 9,500...

  • 1. Eve's Apples opened its business on January 1, 2021, and paid for two insurance policies...

    1. Eve's Apples opened its business on January 1, 2021, and paid for two insurance policies effective that date. The policy for equipment damage was $34,560 for 18 months, and the crop damage policy was $13,800 for a two-year term. What is the balance in Eve's prepaid insurance as of December 31, 2021? 2. Cal Farms reported supplies expense of $2,300,000 this year. The supplies account decreased by $210,000 during the year to an ending balance of $310,000. What was...

  • please answer with solution ! Simba Inc. purchased a two year fire insurance policy for $7,200...

    please answer with solution ! Simba Inc. purchased a two year fire insurance policy for $7,200 on July 1, 2014 effective immediately and credited Cash and debited Insurance Expense for the full amount on July 1, 2014. The Prepaid Insurance had a balance of $6,000 on January 1, 2014 for a previous policy that expired on June 30, 2014. What is the adjusting entry, if any, that is required on December 31, 2014?

  • Do question 1 only 5. For each of the following insurance policies perform the required calculations:...

    Do question 1 only 5. For each of the following insurance policies perform the required calculations: A. Calculate the value of the prepaid insurance at the year-end date shown. B. Prepare the adjusting journal entry for the year end shown. Policy a. b. Oct. 1, 20-4 Dec. 31, 20-4 Purchase date Year-end date Term of policy Premium Oct. 1, 20-4 Dec. 31, 20-5 2 years $360 Oct. 1,20 4 Oct. 31,20-4 1 year $456 1 year $360 Policy d. Mar....

  • On January 1, 2020 the company paid $3,600 for an annual (12 month) flood insurance policy...

    On January 1, 2020 the company paid $3,600 for an annual (12 month) flood insurance policy covering their headquarter building. Assume the company has a monthly accounting period, prepare the adjusting entry needed at the end of January. Assume the company has a quarterly accounting period (report once every 3 months). Prepare the entry needed at the end of the first quarter. A business pays its employees $1,500 per day and payday is each Friday. Prepare the adjusting entry needed...

  • Kiss the Chef Co., a cooking school, purchased a two-year insurance policy on April 1, 2020,...

    Kiss the Chef Co., a cooking school, purchased a two-year insurance policy on April 1, 2020, paying cash of $7,680. Its year-end is December 31. a. Record the journal entry on April 1, 2020. a. How many months are between April 1, 2020 and December 31, 2020? Record the adjusting entry on December 31, 2020, a. How many months are between January 1, 2021 and December 31, 20121 Record the adjusting entry on December 31, 2021. d. How many months...

  • Bobby company paid $24,000 on June 1, 2020, for a two-year insurance policy and recorded the...

    Bobby company paid $24,000 on June 1, 2020, for a two-year insurance policy and recorded the entire amount as insurance expense. December 31, 2020, adjusting entry is

  • Ace Bonding Company purchased merchandise inventory on account. The inventory costs $2,000 and is expected to...

    Ace Bonding Company purchased merchandise inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase? Cost of 3,000 3,000 of Accounts payable QUESTION 8 pe Eve's Apples opened its business on January 1, 2018, and paid for two insurance policies effective that date. The liability policy was $36,000 for 18 months, and the crop damage polioy was $12,000 for a two-year 20187 term. What is the balance in Eve's prepaid...

  • Selected transactions for Dowis Dry Cleaners, Inc. are listed below. The company opened for business on...

    Selected transactions for Dowis Dry Cleaners, Inc. are listed below. The company opened for business on March 1, 2019. Prepare the necessary journal entries in good form. The company also prepares adjusting entries on a monthly basis. Identify each transaction BY DATE. You may omit explanations. 3/1 Issued 10,000 shares of common stock for $18,000 cash. 3/1 Purchased a used truck for $10,000, paying $5,000 cash and the remaining balance on account. 3/1 Paid $3,600 on a 6-month insurance policy,...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT