Question

A+T Williamson Company is making adjustment entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following.

a. A two-year insurance premium of $4800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance n October 1.

b. At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents.

Shipping supplies on hand, January 1 of the year current year                          $13,000

Purchases of shipping supplies during the current year                                      $75,000

Skipping supplies on hand, counted on December 31 of the current year      $ 20,000

Required

2.Record the adjusting entry for supply at December 31 of the current year.

Assuming that the shipping supplies purchased during the current year were debited in full to the account Shipping Supplies. (If no entry is required for a transaction/event, select “No Journal entry required” in the first account field.)

View transaction list

Journal Entry Worksheet

Note: Enter Debits before credits.

Transaction                  General Journal               Debit               Credit   

Answer 1

Answer 2

Solution:

	Account title	Debit	Credit
(a)	Insurance Expense [($4800/24)*3]	$600
	Prepaid Insurance		$600
	(To record expired insurance for 3 months)
(b)	Shipping Supplies Expense [13000+75000-20000]	$68,000
	Shipping Supplies		$68,000
	(To recors shipping supplies expesne)

Answer 3

Answer
Date	Account Tittle	Debit	Credit
31-Dec	Insurance Exp	$    600.0
	Prepaid insurance		$    600.0
Calculation of insurance exp
2 Year insurance exp =4800
for 1 year =4800/2=2400
in current year insurance will utilize for 3 months (1 oct to dec 31 )
2400*3/12
$600