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Your company, which is on the accrual basis retains a lawyer for $12,000 a year and pays 3 months in advance, recording it as Prepaid
Your company, which is on the accrual basis retains a lawyer for $12,000 a year and pays 3 months in advance, recording it as Prepaid Legal Expense. If, at year end, 2 months have elapsed, what adjusting entry do you record?
Prepaid Legal Expense 2,000
Legal Expense 2,000
Legal Expense 2,000
Prepaid Legal Expense 2,000
Legal Expense 3,000
Prepaid Legal Expense 3,000
Prepaid Legal Expense12,000
Cash12,000
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