The ledger of Herrera, Inc. on March 31, 2022, includes the following selected accounts before adjusting entries.
Question:
The ledger of Herrera, Inc. on March 31, 2022, includes the following selected accounts before adjusting entries.
An analysis of the accounts shows the following.
1. Insurance expires at the rate of $300 per month.
2. Supplies on hand total $1,100.
3. The equipment depreciates at $500 per month.
4. During March, services were performed for two-fifths of the unearned service revenue.
Prepare the adjusting entries for the month of March.
Debit Credit Prepaid Insurance $ 2,400 Supplies 2,500 Equipment 30,000 Unearned Service Revenue $9,000
Step by Step Answer:
1 Insurance Expense 300 Prepaid Insurance 300 To record insurance expired 2 Supplies Expense 2...View the full answer
Financial Accounting
ISBN: 9781119594598
11th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Related Video
Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.
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