..... LILY LUMIL. a. The company received its electric bill on December 20 for $375 but will not pay it until January 5. (Use the Utilities Payable account.) Date Accounts and Explanation Debit Credit (a) Dec. 31 To accrue utilities expense. b. Stewart purchased a three-month boat insurance policy on November 1 for $3,600. Stewart recorded a debit to Prepaid Insurance. Date Accounts and Explanation Debit Credit (b) Dec. 31 To record insurance expense. c. As of December 31, Stewart had earned $2,200 of charter revenue that has not been recorded or received Date Accounts and Explanation Debit Credit (c) Dec. 31 d. Stewart's fishing boat was purchased on January 1 at a cost of $56,000. Stewart expects to use the boat for ten years and that it will have a residual va Date Accounts and Explanation Debit Credit (d) Dec. 31 e. On October 1, Stewart received $7,000 prepayment for a deep-sea fishing charter to take place in December. As of December 31, Stewart has complet Date Accounts and Explanation Debit Credit (e) Dec. 31 Requirement 2. If Stewart had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understa Begin by completing the table for adjustment a and then transactions b through e. Specific Category of Accounts on the Balance Sheet Adjusting Entry Over/ Specific Category of Accounts on the Income Statement Over/ Understated Understated (a) (b) (c) (d) (e) Requirements 1. Journalize the adjusting entries needed on December 31 for Stewart Fishing Charters. Assume Stewart records adjusting entries only at the end of the year. 2. If Stewart had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated. Print Done ..... LILY LUMIL. a. The company received its electric bill on December 20 for $375 but will not pay it until January 5. (Use the Utilities Payable account.) Date Accounts and Explanation Debit Credit (a) Dec. 31 To accrue utilities expense. b. Stewart purchased a three-month boat insurance policy on November 1 for $3,600. Stewart recorded a debit to Prepaid Insurance. Date Accounts and Explanation Debit Credit (b) Dec. 31 To record insurance expense. c. As of December 31, Stewart had earned $2,200 of charter revenue that has not been recorded or received Date Accounts and Explanation Debit Credit (c) Dec. 31 d. Stewart's fishing boat was purchased on January 1 at a cost of $56,000. Stewart expects to use the boat for ten years and that it will have a residual va Date Accounts and Explanation Debit Credit (d) Dec. 31 e. On October 1, Stewart received $7,000 prepayment for a deep-sea fishing charter to take place in December. As of December 31, Stewart has complet Date Accounts and Explanation Debit Credit (e) Dec. 31 Requirement 2. If Stewart had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understa Begin by completing the table for adjustment a and then transactions b through e. Specific Category of Accounts on the Balance Sheet Adjusting Entry Over/ Specific Category of Accounts on the Income Statement Over/ Understated Understated (a) (b) (c) (d) (e) Requirements 1. Journalize the adjusting entries needed on December 31 for Stewart Fishing Charters. Assume Stewart records adjusting entries only at the end of the year. 2. If Stewart had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated. Print Done
