Stud Muffin Bakery prepares financial statements on an annual basis and has a December 31, 2020 year-end.
Question:
Stud Muffin Bakery prepares financial statements on an annual basis and has a December 31, 2020 year-end. On July 1, 2020, the bakery purchased a one-year insurance policy for $12,000 cash. The insurance policy covers July 1, 2020 to June 30, 2021.
a. How much does the insurance policy cost per month?
b. How many months are between July 1, 2020 and December 31, 2020?
c. Record the journal entry on July 1, 2020.
d. In order to prepare the annual financial statements, record the adjusting journal entry on December 31, 2020.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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a 1000 12000 12 months b 6 months Date Account Titles and Ex...View the full answer
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Related Book For 
Fundamental Accounting Principles Volume I
ISBN: 978-1260305821
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
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