On June 1, 2015, Bere Ltd. pays $6,000 to Marla Insurance Corp. for a one-year insurance policy.
Question:
On June 1, 2015, Bere Ltd. pays $6,000 to Marla Insurance Corp. for a one-year insurance policy. Both companies have fiscal years ending December 31 and adjust their accounts annually.
(a) Record the June 1 transaction on the books of (1) Bere and (2) Marla.
(b) Calculate the amount of insurance that expired during 2015 and the unexpired cost at December 31.
(c) Prepare the adjusting entry required on December 31 by (1) Bere and (2) Marla.
(d) Post the above entries and indicate the adjusted balance in each account.
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a 1 Bere Ltd June 1 Prepaid Insurance 6000 Cash 6000 2 Marla Insurance Corp June 1 ...View the full answer
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Related Book For 
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
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