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How to do Adjustung journal entry ?
Asked Jun 29, 2011, 08:13 PM
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2 Answers Please help me do the following, I don't understand this problem but I am working on it and if I could get some guidance it would really help: Record the adjusting journal entries for Flint Hills Co. As of December 31. A. Flint Hills initially records the payment of all insurance premiums as prepaid insurance. The trial balance shows a balance of $4200 in prepaid insurance. A review of the insurance policies reveals that $1250 of insurance is unexpired. B. Flint Hills borrowed $30,000 from Harris Bank on October 1 with 12% interest on the one year note. C. During the year, Flint Hills received a $5,000 cash advance from a customer for merchandise to be shipped next year. When received, the $5,000 was credited to Sales. D. On December 1, Flint Hills signed a contract to provide 3 month service to a customer. Payment from customer will be received on March 1 of the new year. No entry was made on December 1 when the $4,500 contract was signed. E. Flint Hills recorded all supplies purchased during the year as supplies expense. The balance in supplies expense is $5,400. A count of the supplies on hand at the end of the month reveals $1,100. |
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| A. You need to compute the amount of insurance that was used during the period. Prepaid Balance minus the unexpired insurance. Your Accounts will be Prepaid Insurance and Insurance Expense. B. You need to compute the interest expense and payable amount. Principle loan amount times Rate time Times time (3/12 months) C. The amount is given and you need to transfer the amount from Sales to Unearned Revenue. D. You need to record the cash received as Unearned Revenue. E. You need to transfer the Supplies on hand amount to your Supplies account. | ||||
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