Question
Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2017. 1. Purchased a 1-year insurance
Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2017.
1. Purchased a 1-year insurance policy on June 1 for $1,200 cash.
2. Paid $6,800 on August 31 for 5 months rent in advance.
3. On September 4, received $2,880 cash in advance from a corporation to sponsor a game each month for a total of 9 months for the most improved students at a local school.
4. Signed a contract for cleaning services starting December 1 for $850 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.)
5. On December 5, received $1,450 in advance from a gaming club. Determined that on December 31, $500 of these games had not yet been played.
For each of the above transactions, prepare the journal entry to record the initial transaction. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. 1. June 1, 2017 Prepaid Insurance Date Account Titles and Explanation Debit Credit 1200 Cash 1200 2. Aug. 31, 2017 Prepaid Rent 6800 Cash 6800 3. Sept. 4, 2017 Cash 2880 Unearned Service Revenue 2880 4. Nov. 30, 2017 Prepaid Cleaning 1700 Cash 1700 5. Dec. 5, 2017 Cash 1450 Unearned Service Revenue 1450Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started