QUESTION 16 (20 MARKS: 24 MINUTES) Jumping Jackrabbits is a pet store in Johannesburg with a year-end of 31 December. The business pays makes monthly insurance payments in advance on the last day of each month (.e. January's insurance is paid on 31 December). The insurance contract first came into effect on 1 April 2020. The monthly insurance fee (also known as a "premium") was initially R18 000 per month, and then increased to R20 000 per month with effect from 1 April 2021. The bookkeeper debits all insurance payments to the insurance expense account. You are required to: 1. Prepare the reversing journal entry(ies) required for insurance on 1 January 2021. No dates or narrations are required. (2 marks) 2. Prepare the general journal entry(ies) that the bookkeeper would have processed in respect of insurance during the financial year ended 31 December 2021. You may aggregate (add together) like entries. No dates or narrations are required. (4 marks) 3. Show how insurance expense and the prepaid insurance asset would appear in the pre- adjustment trial balance of Jumping Jackrabbits as at 31 December 2021. (2 marks) 4. Prepare the adjusting journal entry(ies) required to correctly report the information in respect of insurance on 31 December 2021. No dates or narrations are required. (2 marks) 5. Show how insurance expense and the prepaid insurance asset would appear in the post- adjustment trial balance of Jumping Jackrabbits as at 31 December 2021. (2 marks) 6. Show how insurance would be reported in the statement of comprehensive income of Jumping Jackrabbits for the year ended 31 December 2021. (2 marks) 7. Prepare the closing journal entry(ies) required to correctly report the information in respect of insurance on 31 December 2021. No dates or narrations are required. (2 marks) 8. Show how insurance expense and the prepaid insurance asset would appear in the post-closing trial balance of Jumping Jackrabbits as at 31 December 2021, (2 marks) 9. Show how insurance would be reported in the statement of financial position of Jumping Jackrabbits as at 31 December 2021. (2 marks)
