Question

a. Details of Prepaid Insurance are shown in the account: Prepaid Insurance Jan 1 Bal. 1,200 Mar 31 3,500 Jackson prepays insurance on March 31 each year. At December 31, $875 is still prepaid. b. Jackson pays employees each Friday. The amount of the weekly payroll is $6,000 for a five-day work week. The current accounting period ends on Monday. C. Jackson has a note receivable. During the current year, the company has earned accrued interest revenue of $510 that it will receive next year. d. The beginning balance of Supplies was $2,700. During the year, Jackson purchased supplies costing $5,800, and at December 31 supplies on hand is $1,400. e. Jackson is providing financial services for Orca Investments Inc., and the owner of Orca paid Jackson $10,500 as the annual service fee. Jackson recorded this amount as Unearned Service Revenue. Jackson estimates that it has earned one-third of the total fee during the current year. f. Depreciation for the current year includes Office Furniture, $1,200 and Equipment, $2,660. Make a compound entry. (For your convenience, the descriptions of the transactions shown in this pop-up have been fully integrated into the directions for each journal entry so you may now close the pop-up while solving this problem.)

Answer 1

Requirement 1:

	Date	Account title and explanation	Debit	Credit
a	Dec 31	Insurance expense [1200+3500-875]	$3,825
		Prepaid insurance		$3,825
		[To record insurance expense]
b	Dec 31	Salaries expense [6000/5]	$1,200
		Salaries payable		$1,200
		[To record accrued salaries expense]
c	Dec 31	Interest receivable	$510
		Interest revenue		$510
		[To record accrued interest revenue]
d	Dec 31	Supplies expense [2700+5800-1400]	$7,100
		Supplies		$7,100
		[To record supplies expense]
e	Dec 31	Unearned service revenue [10500 x 1/3]	$3,500
		Service revenue		$3,500
		[To record revenue earned from unearned]
f	Dec 31	Depreciation expense	$3,860
		Accumulated depreciation-furniture		$1,200
		Accumulated depreciation-equipment		$2,660
		[To record depreciation expense]