Exercise 3-17 (Part Level Submission) At Cambridge Company, prepayments are debi
ID: 2446146 • Letter: E
Question
Exercise 3-17 (Part Level Submission) At Cambridge Company, prepayments are debited to expense when paid, and unearned revenues are credited to revenue when cash is received. During January of the current year, the following transactions occurred. Jan. 2 Paid $3,600 for fire insurance protection for the year. 10 Paid $2,400 for supplies. 15 Received $5,700 for services to be performed in the future. On January 31, it is determined that $2,100 of the services were performed and that there are $800 of supplies on hand.
Journalize and post the January transactions. (Use T-accounts.)
Explanation / Answer
Journal entries
The Transactions of 31st Jan will not be recorded as Cambridge Company follows Cash basis of accounting.
Cash Account
Insurance Expense
Supplies Expense
Service Revenue
Date Account Debit($) Credit($) Jan-2 Insurance Expense 3,600 To Cash 3,600 (Being cash paid for fire insurance protection) Jan-10 Supplies expense 2,400 To Cash 2,400 (Being Cash paid for Supplies) Jan-15 Cash 5,700 To Services Revenue 5,700 (Being Cash received for Services to be performed later)Related Questions
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