题目
题目
未知题型

Mountaineer Excavation operates in a low-lying area that is subject to heavy rains and flooding. Because of this, Mountaineer purchases one year of flood insurance in advance on March 1, paying $33,600 ($2,800 per month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Prepaid Insurance and Insurance Expense (assuming the balance of Prepaid Insurance at the beginning of the year is $0).

题目图片
查看解析

查看解析

标准答案
Please login to view
思路分析
Beginning the analysis, I will examine each proposed item in turn to understand what it represents and whether it aligns with proper accounting for a one-year flood insurance policy purchased on March 1. Option 1: Journal Entry 1 (March 1): Debit Prepaid Insurance $33,600, Credit Cash $33,600. This entry records the initial payment for a one-year insurance policy. Since the benefit extends over future periods (12 months) and the company pays cash upfront, it is appropriate to recognize the asset Prepaid Insurance and reduce Cash by the same amount. This matches the concept of prepaying for a serv......Login to view full explanation

登录即可查看完整答案

我们收录了全球超50000道考试原题与详细解析,现在登录,立即获得答案。

类似问题

Paddy Co purchased a 1 year insurance on 1 April 2024 for $24000. What adjustment entry will the Accountant record on 31st Dec 2024?

Paddy Co. bought a 1 year insurance on 1 October 2024 for $12000. What adjustment entry will Paddy record on 31 October 2024?

On April 1, 2024, the premium on a one-year insurance policy was purchased for $3,000 cash with the insurance coverage beginning on that date. The books are adjusted only at year-end. Which of the following correctly describes the effect on the financial statements of the December 31, 2024 adjusting entry? 

Eve's Apples opened its business on January 1, 2027, and paid for two insurance policies effective that date. The policy for equipment damage was $37,260 for 18 months, and the crop damage policy was $12,600 for a two-year term. What is the balance in Eve's prepaid insurance as of December 31, 2027?

更多留学生实用工具

加入我们，立即解锁 海量真题 与 独家解析，让复习快人一步！