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At Skysong, Inc., prepayments are debited to expense when paid, and unearned revenues are credited to revenue when cash is received. During January of the
At Skysong, Inc., prepayments are debited to expense when paid, and unearned revenues are credited to revenue when cash is received. During January of the current year, the following transactions occurred.
Jan. 2 | Paid $1,680 for fire insurance protection for the year. | |
10 | Paid $1,496 for supplies. | |
15 | Received $5,368 for services to be performed in the future. |
On January 31, it is determined that $2,200 of the services were performed and that there are $572 of supplies on hand.
Date Account Titles and Explanation Debit Credit Jan. 31 Prepaid Insurance 140 Insurance Expense 14 (To record expired insurance) Jan. 31 Supplies 2200 Supplies Expense 220 (To record supplies used) Jan. 31 Service Revenue 924 Unearned Service Revenue 92 Cash 1/15 5,368 1/2 1,680 1/10 1,496 Bal. Bal. Prepaid Insurance 1/31 Insurance Expense 1/2 1,680 1/31 Bal. 140 Supplies 1/31 Supplies Expense 1/10 1,496 1/31 Supplies 1/31 Supplies Expense 1/10 1,496 1/31 Bal. V Unearned Service Revenue
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