Question

The first picture

Henderson fishing charters has collected data for the December 31 adjusting Entries:

The top photo is the data the second is the requirement for the problem the bottom is the problem itself

a. The company received its electric bill on December 20 for $375 but will not pay it until January 5. (Use the Utilities Payable account.) b. Henderson purchased a three-month boat insurance policy on November 1 for $600. Henderson recorded a debit to Prepaid Insurance. c. As of December 31, Henderson had earned $4,000 of charter revenue that has not been recorded or received. d. Henderson' s fishing boat was purchased on January 1 at a cost of $72,500. Henderson expects to use the boat for ten years and that it will have a residual value of $2,500. Determine annual depreciation assuming the straight -ine depreciation method is used. On October 1, Henderson received $7,500 prepayment for a deep-sea fishing charter to take place in December. As of December 31, Henderson has completed the charter e.

Answer 1

(a) Dec. 31	Utilities Expense	375
	Utilities Payable		375
	To accrue utilities expense.
(b) Dec. 31	Insurance Expense	400		=600*2/3
	Prepaid Insurance		400
	To record insurance expense.
(c) Dec. 31	Accounts Receivable	4000
	Service Revenue		4000
	To accrue service revenue.
(d) Dec. 31	Depreciation Expense—Boat	7000		=(72500-2500)/10
	Accumulated Depreciation—Boat		7000
	To record depreciation on boat.
(e) Dec. 31	Unearned Revenue	7500
	Service Revenue		7500
	To record service revenue that was collected in advance.
2
a	Liability	Understated	Expense	Understated
	Equity	Overstated
b	Asset	Overstated	Expense	Understated
	Equity	Overstated
c	Asset	Understated	Revenue	Understated
	Equity	Understated
d	Asset	Overstated	Expense	Understated
	Equity	Overstated
e	Liability	Overstated	Revenue	Understated
	Equity	Understated