Miscellaneous transactions and adjusting entries. Give the journal entry to record (1) each of the following transactions
Question:
Miscellaneous transactions and adjusting entries. Give the journal entry to record (1) each of the following transactions as well as (2) any necessary adjusting entries on December 31, Year 6, assuming that the firm uses a calendar-year accounting period. You may omit explanations for the journal entries.
a. Sung Corporation gives a 60-day note to a supplier on December 2, Year 6. The note in the face amount of $6,000 replaces an open account payable of the same amount. The note is due on January 30, Year 7, with interest at 10 percent per year.
b. Allstate Insurance Company sells a two-year insurance policy on September 1, Year 6, receiving the two-year premium of $18,000 in advance. It credits a liability account.
c. Blaydon Company acquires a machine on October 1, Year 6, for $40,000 cash. It expects the machine to have a $4,000 salvage value and a four-year life.
d. Pyke Electronics Company acquires an automobile on July 1, Year 6, for $24,000 cash. It expects the automobile to have a $3,000 salvage value and a three-year life.
e. Devine Company rents needed office space for the three-month period beginning December 1, Year 6. It pays the three months' total rent of $12,000 on this date, debiting an asset account.
f. Hall Corporation begins business on November 1, Year 6. It acquires office supplies costing $7,000 on account, debiting an asset account. Of this amount, it pays $5,000 by yearend. A physical inventory indicates that office supplies costing $1,500 are on hand on December 3 1 , Year 6.
Step by Step Answer:
Financial Accounting Introduction To Concepts Methods And Uses
ISBN: 9780324222975
11th Edition
Authors: Clyde P. Stickney, Roman L. Weil