Understanding the alternative treatment of prepaid expenses and unearned revenues Speedy Pack'n Mail completed the following transactions during 2016:
Nov. 1 Paid $5,200 store rent covering the four-month period ending February 28, 2017.
1 Paid $9,600 insurance covering the six-month period ending April 30, 2017.
Dec. 1 Collected $5,400 cash in advance from customers. The service revenue will be earned $1,800 monthly over the three-month period ending February 28, 2017.
1 Collected S10,000 cash in advance from customers. The service revenue will be earned $2,000 monthly over the five-month period ending April 30, 2017.
Requirements
1. Journalize the transactions assuming that Speedy Pack'n Mail debits an asset account for prepaid expenses and credits a liability account for unearned revenues.