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    mjacobson86's Avatar
    mjacobson86 Posts: 20, Reputation: 1
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    #1

    Feb 9, 2009, 02:58 PM
    Journal entry
    What is the correct entry for this?

    August 5th
    Paid $2,400 on a one-year insurance policy, effective August 1.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Feb 9, 2009, 06:44 PM

    Debit Prepaid Insurance for the amount
    Credit Cash for the amount paid
    mjacobson86's Avatar
    mjacobson86 Posts: 20, Reputation: 1
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    #3

    Feb 9, 2009, 08:36 PM

    Even though the entry is for August 5th?
    codyman144's Avatar
    codyman144 Posts: 544, Reputation: 31
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    #4

    Feb 10, 2009, 11:51 AM
    Quote Originally Posted by mjacobson86 View Post
    even though the entry is for august 5th?
    Not quite... you give it a try and let me know any assumptions you have made...
    mjacobson86's Avatar
    mjacobson86 Posts: 20, Reputation: 1
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    #5

    Feb 10, 2009, 12:45 PM

    OK so would it be:

    dr. prepaid insurance 1960
    Insurance expense 40
    Cr. Cash 2000
    codyman144's Avatar
    codyman144 Posts: 544, Reputation: 31
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    #6

    Feb 10, 2009, 01:05 PM

    How often does the company close its books? What is your assumption here that we need to be completely accurate as of Aug 5? Or are we following a monthly closing schedule?
    mjacobson86's Avatar
    mjacobson86 Posts: 20, Reputation: 1
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    #7

    Feb 10, 2009, 02:14 PM

    Well its just a comprehension problem for the month of August, no other months.
    codyman144's Avatar
    codyman144 Posts: 544, Reputation: 31
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    #8

    Feb 10, 2009, 05:01 PM

    Than 1/12 of the policy is expense and 11/12 go to prepaid...
    mjacobson86's Avatar
    mjacobson86 Posts: 20, Reputation: 1
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    #9

    Feb 10, 2009, 05:32 PM

    I need help with these entires.

    Record the interest incurred on the note for the month. Note is 8,000 with 9% 36 month note.

    Accrued but unpaid employee salaries were $600.

    I have: dr. salaries expense 600
    Cr. Salaries payable 600
    codyman144's Avatar
    codyman144 Posts: 544, Reputation: 31
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    #10

    Feb 12, 2009, 06:47 AM

    2nd one is right, any ideas on the 1st? Let me know how you get your numbers.
    mjacobson86's Avatar
    mjacobson86 Posts: 20, Reputation: 1
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    #11

    Feb 12, 2009, 02:39 PM

    I got

    dr. interest expense 20
    Cr. Interest payable 20

    I did 8000*.09/36
    codyman144's Avatar
    codyman144 Posts: 544, Reputation: 31
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    #12

    Feb 12, 2009, 03:17 PM

    9% rate per year so

    .09/12

    But you have most of it correct.
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