Question

Record the opening cash deposit by the owner.  The owner opened the company on January 1st by depositing $50,000 into the bank account.  Record the Cash and Opening Balance Equity through the use of the one Journal Entry option.

For your company, you have been billed $1,200 for the entire year of insurance. This means that only $100 is an expense each month ($1,200 annual total / 12 months = $100 expense per month).

• You will need to create a general ledger account for Prepaid Insurance, Account Number 1440 (Other Current Asset)

• On January 31^st, enter a journal entry moving $1,100 from Insurance Expense (6650) to Prepaid Insurance (1440)

• On February 28, enter a journal entry to record the Insurance Expense for the month of February

• (Please show steps on how to do in quick books)

Answer 1

1	Date	Accounts Titles	Debit	Credit
		Cash	$50,000
		Owners’ Equity		$50,000
		(To record started business)
2	Date	Accounts Titles	Debit	Credit
	Jan 1	Insurance Expense	$1,200
		Cash		$1,200
		(To record insurance payment)
	Jan 31	Prepaid Insurance	$1,100
		Insurance Expense		$1,100
		(To record prepaid insurance)
	Feb 28	Insurance Expense	$100
		Prepaid Insurance		$100
		(To record insurance exp.)
	Account: Insurance Expense					Account No: 6650
						Balance
	Date	Details	Ref.	Debit	Credit	Debit	Credit
	Jan 1	Cash	✓	$1,200		$1,200
	Jan 31	Prepaid Insurance	✓		$1,100	$100
	Feb 28	Prepaid Insurance	✓	$100		$200
	Account: Prepaid Insurance					Account No: 1440
						Balance
	Date	Details	Ref.	Debit	Credit	Debit	Credit
	Jan 31	Insurance Expense	✓	$1,100		$1,100
	Feb 28	Insurance Expense	✓		$100	$1,000