In each of the following transactions (a) through (c) for Catenas Marketing Company, use the process illustrated
Question:
In each of the following transactions (a) through (c) for Catena’s Marketing Company, use the process illustrated in the chapter to record the adjusting entry at the end of the current year, December 31. The process includes (1) determining if revenue was earned or an expense was incurred and (2) determining whether cash was received or paid in the past or will be received or paid in the future.
a. Collected $1,200 rent for the period December 1 of the current year to April 1 of next year, which was credited to Unearned Rent Revenue on December 1.
b. Purchased a machine for $32,000 cash on January 1. The company estimates annual depreciation at $3,200.
c. Paid $5,000 for a two-year insurance premium on July 1 of the current year; debited Prepaid Insurance for that amount.
Step by Step Answer:
Financial Accounting
ISBN: 9781264229734
11th Edition
Authors: Robert Libby, Patricia Libby, Frank Hodge