1. The prepaid insurance account shows a debit of$6,624, representing the cost o
ID: 2433416 • Letter: 1
Question
1. The prepaid insurance account shows a debit of$6,624, representing the cost of a 2-year fire insurance policydated August 1 of the current year. 2. On November 1, Rental Revenue was credited for$3,144, representing revenue from a subrental for a 3-month periodbeginning on that date. 3. Purchase of advertising materials for $847 duringthe year was recorded in the Advertising Expense account. OnDecember 31, advertising materials of $349 are on hand. 4. Interest of $854 has accrued on notespayable.Need help writing adjusting entries for these 4 and reversingentries where applicable.
1. The prepaid insurance account shows a debit of$6,624, representing the cost of a 2-year fire insurance policydated August 1 of the current year. 2. On November 1, Rental Revenue was credited for$3,144, representing revenue from a subrental for a 3-month periodbeginning on that date. 3. Purchase of advertising materials for $847 duringthe year was recorded in the Advertising Expense account. OnDecember 31, advertising materials of $349 are on hand. 4. Interest of $854 has accrued on notespayable.
Explanation / Answer
1. InsuranceExpense ($6,624 x 5 / 24) $1,380 PrepaidInsurance $1,380 Insuranceexpenses debited for the period from August 1 toDecember 31 - 5 months 2. RentalRevenue ($3,144x1/3) $1,048 AccruedRentalRevenue $1,048 3. Stock of AdvertisingMaterials $349 AdvertisingExpenses $349 4. Interestexpenses $854 AccruedInterest onNotes $854 write narration yourself for other entries
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