Ask Experts Questions for FREE Help !
Ask
    Jamaar's Avatar
    Jamaar Posts: 1, Reputation: 1
    New Member
     
    #1

    Jun 30, 2017, 10:03 AM
    Prepaid Expenses Adjusting Entries
    On a company's Unadjusted Trial Balance at December 31 2004, there is a Prepaid Expenses balance of $15,600.

    On March 1 2002, the company prepaid $36,000 for a three-year rental lease with occupancy commencing on the payment date. The remaining balance in the prepaid expenses account pertains to a two-year fire insurance policy purchased on April 1 2004.

    Question: What will be the net adjustment to the prepaid expenses account on the December 31 2004 Adjusted Trial Balance?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 172
    Ultra Member
     
    #2

    Jul 12, 2017, 04:01 PM
    Without all the facts it is not possible to answer. We are expected to believe at first glance that 31st December is the balance date. If 31st December is the balance date then the balance should consist of $14,000 for the rental and $1,600 for the insurance. That being so the adjusting entry will be for $12,600

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Adjusting entries for prepaid insurance [ 0 Answers ]

Performed services for patients with dental plan insurance. $680 dollars of service was earned by not yet billed

Adjusting entries for prepaid and accrued taxes [ 0 Answers ]

Andular Financial Services was organized on April 1 of the current year. On April 2, Andular prepaid $9,000 to the city taxes (license fees) for the next 12 months and debited the prepaid taxes account. Andular is also required to pay in January an annual tax (on property) for the previous calendar...

Adjusting Entries for Prepaid Insurance [ 4 Answers ]

An examination of the prepaid Insurance account shows a balance of $10,280 at the end of an accounting period, before adjustment. Prepare entries in journal form to record the insurance expense for the period under the following independent assumptions: 1. An examination of the insurance...

Prepaid Insurance Adjusting Entries [ 1 Answers ]

Not sure exactly how to figure this or even to record it, here is what it looks like in my book: XX's accounting records include the following account balances: December 31, ...


View more questions Search