Hi. I am a newbie here.
I just have some querries about owner's investment and an adjusting entry...


Q1 : how will you classify An OWNER's INVESTMENT in a firm?
Would it be :
Use of funds
Source of funds
Source of income
An additional expense


Q2 : On December 1, a transaction was made for contracted local newspaper for 3 months of advertising and paid in full 600.

The entry made was
DR--advertising expense 600
CR--cash 600

What will be the adjusting entry for: 1 MONTH'S ADVERTISING WAS EXPENDED IN ACCORDANCE WITH THE AGREEMENT MADE WITH THE NEWSPAPER ON DEC. 1?


Any help is highly appreciated.

1. A source of funds because the owner invested into the company.

2. Debit Prepaid Advertising for 400
Credit Advertising Expense for 400
Because only 1 month of advertising expense was used.

Quote:

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Originally Posted by pready

1. A source of funds because the owner invested into the company.

2. Debit Prepaid Advertising for 400
Credit Advertising Expense for 400
Because only 1 month of advertising expense was used.

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thank you.