Donnas Dairy Free Donuts (DDFD) prepares financial statements on an annual basis and has a December 31,
Question:
Donna’s Dairy Free Donuts (DDFD) prepares financial statements on an annual basis and has a December 31, 2023 year-end. On July 1, 2023, DDFD purchased a one-year insurance policy for $24,000 cash. The insurance policy covers July 1, 2023 to June 30, 2024.
a. How much does the insurance policy cost per month?
b. How many months are between July 1, 2023 and December 31, 2023?
c. Record the journal entry on July 1, 2023.
d. In order to prepare the annual financial statements, record the adjusting journal entry on December 31, 2023.
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Step by Step Answer:
a To calculate the cost of the insurance policy per month you would divide the total cost by the num...View the full answer
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Related Book For 
Fundamental Accounting Principles Volume 1
ISBN: 9781260881325
17th Canadian Edition
Authors: Kermit D. Larson, Heidi Dieckmann, John Harris
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