The ledger of Milton, Inc. on March 31, 2020, includes the following selected accounts before adjusting entries.
Question:
An analysis of the accounts shows the following.
1. Insurance expires at the rate of $400 per month.
2. Supplies on hand total $1,600.
3. The equipment depreciates $480 per month.
4. During March, services were performed for two-fifths of the unearned service revenue.
Prepare the adjusting entries for the month of March.
Debit Credit $ 2,400 Prepaid Insurance Supplies Equipment 2,500 30,000 $9,000 Unearned Service Revenue
Step by Step Answer:
1 Insurance Expense 400 Prepaid Insurance 400 To record insur...View the full answer
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Related Video
Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.
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