QS $3-7($Algo$)$ Adjusting prepaid $($deferred$)$ expenses LO P$1$

For each separate case, record the necessary adjusting entry.

a$.$ On July $1,$ Lopez Company paid $$2,100$ for six months of insurance coverage. No adjustments have been made to the Prepaid

Insurance account, and it is now December $31.$

b$.$ Zim Company has a Supplies account balance of $$6,800$ at the beginning of the year. During the year, it purchases $$2,900$ of

supplies. As of December $31,$ a physical count of supplies shows $$1,250$ of supplies available.

Prepare the year$-$end adjusting entries to reflect expiration of the insurance and correctly report the balance of the Supplies account

and the Supplies Expense account as of December $31.$

Journal entry worksheet

Record year$-$end adjusting entry to reflect expiration of the insurance as of

December $31.$

Note: Enter debits before credits.