Journal
1 | Prepaid insurance | 10,800 | |
Insurance expense | 10,800 | ||
2. | Depreciation expense | 12,750 | |
Accumulated depreciation - Equipment | 12,750 | ||
3 | Salaries expense | 17,500 | |
Salaries payable | 17,500 | ||
4 | Interest expense | 4,400 | |
Interest payable | 4,400 | ||
5 | Deferred rent revenue | 2,200 | |
Rent revenue | 2,200 | ||
6 | Rent revenue | 4,400 | |
Deferred rent revenue | 4,400 |
1. Insurance expense for 6 months = 12,960 x 6/36
= $2,160
Prepaid insurance on December 31, 2021 = 12,960 - 2,160
= $10,800
2.Interest expense for 2 months = 220,000 x 12% x 2/12
= $4,400
Kindly comment if you need further assistance. Thanks
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