Journalizing prepaid insurance
Nettet8. feb. 2024 · The following errors took place in journalizing and posting transactions: Insurance of $18,800 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. Dividends of $18,000 were recorded as a debit to Wages Expense and a credit to Cash. Journalize the entries to correct the errors. NettetIllustration of Prepaid Insurance . As a result of the above entry and adjusting entry, the income statement for 20X1 would report insurance expense of $3,000, and the balance sheet at the end of 20X1 would report prepaid insurance of …
Journalizing prepaid insurance
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NettetPrepaid expenses may need to be adjusted at the end of the accounting period. The adjusting entry for prepaid expense depends upon the journal entry made when it was … NettetEntries to correct errors The following errors took place in journalizing and posting transactions: A. Insurance of 18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. B. Dividends of 10,000 were recorded as a debit to Wages Expense and a credit to Cash.
NettetThe balance in the prepaid insurance account, before adjustment at the end of the year, is $27,000. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: Feedback Check My Work Correct a. The amount of insurance expired during the year is $20,250. Insurance Expense 20 ... Nettet23. feb. 2024 · Because the pre-paid expense has value ($12,000) it is considered to be an asset. 2 Record the journal entry for making the pre-paid expense payment. The first step begins when you pay out the cash for the pre-paid expense. There must be an entry in the general journal to reflect this activity.
NettetExample 2 – Asset / expense adjusting entry for prepaid insurance MicroTrain Company purchased for cash an insurance policy on its trucks for the 12 month period beginning December 1. The journal entry made on December 1, to record the purchase of the policy is illustrated in the following table (remember, when we pay for expenses in advance … Nettet21. sep. 2024 · Prepaid insurance is something that not only businesses face on regular basis, but also everyone who has an automobile, a house, or anything …
NettetAdjustment for prepaid expense The prepaid insurance account had a beginning balance of 11,500 and was debited for 18,000 of premiums paid during the year. Journalize the …
NettetThe company can record the prepaid insurance with the journal entry of debiting the prepaid insurance account and crediting the cash account. In this journal entry, the company records the prepaid insurance as an asset since it is an advance payment which the company has not incurred the expense yet. maverick headsetNettetBusiness Accounting Entries to Correct Errors The following errors took place in journalizing and posting transactions: Insurance of $5,400 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. maverick headsNettetPrepaid Insurance: 1,300 ... Journalize the closing entries using the four steps in the correct sequence. 6. Prepare a post-dosing trial balance. Check Figure Post-closing trial balance total, 31,765. arrow_forward. Entries into T accounts and trial balance Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. herman miller gaming chair release dateNettetThe journal entry is debiting prepaid insurance $ 120,000 and credit cash $ 120,000. The journal entry increases prepaid insurance by $ 120,000 on the balance sheet. Cash is … maverick health lewisburg wvNettetJournalizing and Posting Closing Entries The eighth step in the accounting cycle is preparing closing entries, which includes journalizing and posting the entries to the ledger. Four entries occur during the closing process. The first entry closes revenue accounts to the Income Summary account. maverick headroomNettet6. okt. 2024 · Prepaid expenses are future expenses that are paid in advance and hence recognized initially as an asset. As the benefits of the expenses are recognized, the related asset account is decreased and expensed. The most common types of … maverick health brandon msNettetInsurance is typically purchased by prepaying for an annual or semi-annual policy. Or, rent on a building may be paid ahead of its intended use (e.g., most landlords require … maverick healthcare woodstock ny