Queen & Ace Games (Q&A Games) runs its business from January 1 to December 31 (year-end). On

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Queen & Ace Games (Q&A Games) runs its business from January 1 to December 31 (year-end). On January 1, 2020, Q&A Games pays $12,000 for a one-year insurance policy that covers January 1, 2020 to December 31, 2020. Record the journal entries for the following:

1. Record the initial entry on January 1, 2020, when Q&A Games pays for the insurance policy.

2. The following are independent situations. Assume Q&A Games reports using the following accounting periods.

a. Monthly (1 month)—Assume Q&A Games reports on a monthly basis. Record the adjusting journal entry on January 30, 2020.

b. Quarterly (3 months)—Assume Q&A Games reports on a quarterly basis. Record the adjusting journal entry on March 30, 2020.

c. Semi-annual (6 months)—Assume Q&A Games reports on a semi-annual basis. Record the adjusting journal entry on June 30, 2020.

d. Annual (12 months)—Assume Q&A Games reports on an annual basis. Record the adjusting journal entry on December 31, 2020.

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Fundamental Accounting Principles Volume I

ISBN: 978-1260305821

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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