On August 1, 2019, a firm purchased a 1-year insurance policyfor $4,500 and paid the...

On August 1, 2019, a firm purchased a 1-year insurance policy for $4,500 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2019, is

Multiple Choice $4,500. $1,875. $1,500. $2,625.

Solutions

Expert Solution

Insurance expense for the year

= 4,500 * (5 months /12 months ) (i.e August to December)

= 1,875

Option B is the answer

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

A firm purchased a three-year insurance policy for $11,520 on July 1, 2019. The $11,520 was...

A firm purchased a three-year insurance policy for $11,520 on July 1, 2019. The $11,520 was debited to the Prepaid Insurance account. On December 1, 2019, a firm signed a contract with a local radio station for advertising that will extend over a two-year period. The firm paid $31,680 in advance and debited the amount to Prepaid Advertising. Prepare end-of-month adjusting entries for each of the above situations.

A firm purchased a three-year insurance policy for $13,500 on July 1, 2019. The $13,500 was...

A firm purchased a three-year insurance policy for $13,500 on July 1, 2019. The $13,500 was debited to the Prepaid Insurance account. On December 1, 2019, a firm signed a contract with a local radio station for advertising that will extend over a two-year period. The firm paid $36,000 in advance and debited the amount to Prepaid Advertising. Prepare end-of-month adjusting entries for each of the above situations.

1. A firm purchased a four-year insurance policy for $8,640 on July 1, 2019. The $8,640...

1. A firm purchased a four-year insurance policy for $8,640 on July 1, 2019. The $8,640 was debited to the Prepaid Insuranceaccount. 2. On December 1, 2019, a firm signed a contract with a local radio station for advertising that will extend over a three-year period. The firm paid $42,480 in advance and debited the amount to Prepaid Advertising. Prepare end-of-month adjusting entries for each of the above situations.

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits...

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. What will the balance be in the Prepaid Insurance account on the Balance Sheet for the current year ended December 31? Select one: A. $1,000. B. $2,400. C. $1,400. D. $400. E. $1,200.

Cameron Inc. paid $4,500 for one year insurance effective July 1. The general ledger account effects...

Cameron Inc. paid $4,500 for one year insurance effective July 1. The general ledger account effects are: Insurance Payable is recorded as a debit and Cash is recorded as a credit Prepaid Insurance is recorded as a credit and Cash is recorded as a debit Insurance Expense is recorded as a debit and Cash is recorded as a credit Prepaid Insurance is recorded as a debit and Cash is recorded as a credit

BU Curriculum Corporation issued $900,000 of 7% bonds on August 1, 2019, due on August 1, 2024. The interest is to be paid twice a year on February 1 and August 1.

Bond interest and discount amortization. BU Curriculum Corporation issued $900,000 of 7% bonds on August 1, 2019, due on August 1, 2024. The interest is to be paid twice a year on February 1 and August 1. The bonds were sold to yield 9% effective annual interest. BU Curriculum Corporation closes its books annually on December 31. (b) Prepare the journal entries for the following: 1. August 1, 2019 bond issue 2. Adjusting entry for December 31, 2019...

Q1)A Company purchased computer equipment on May 1, 2019 for $4,500. The company expects to use...

Q1)A Company purchased computer equipment on May 1, 2019 for $4,500. The company expects to use the equipment for 3 years. It has no salvage value. If financial statements are to be prepared on monthly, the company should make the following adjusting entry: * 1)Debit Depreciation Expense, $125; Credit Accumulated Depreciation, $125 2Debit Depreciation Expense, $1,500; Credit Accumulated Depreciation, $1,500 3)Debit Depreciation Expense, $1,000; Credit Accumulated Depreciation, $1,000 4)None of the above Q2))Baden Company received a check for $16,000 on...

Oakland Farms purchased a one-year insurance policy for $36,000 on October 1, 2019. At the beginning...

Oakland Farms purchased a one-year insurance policy for $36,000 on October 1, 2019. At the beginning of the year (1/1/2019), they had $18,000 in prepaid expenses for insurnace. What is the necessary adjustment, journal entry, income statement adjustment, and balance sheet entry?

On August 1,20x8 your calendar year firm takes out a 3 year insurance policy at a...

On August 1,20x8 your calendar year firm takes out a 3 year insurance policy at a total cost of $3600 that requires a 50% down payment and the remainder after 6 months. Insurance expense for 20x8 is what

On August 1, 2019 X company purchased furniture at $13,000. The salvage value is $1,000 and...

On August 1, 2019 X company purchased furniture at $13,000. The salvage value is $1,000 and the useful life is 5 years. X uses the double straight-line method. The depreciation expense for 2019 is ------. Select one: a. $833. b. $1,333. c. $2,167. d. $1,000. Clear my choice On January 1, 2021, X Co. issued ten-year bonds with a face value of $5,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds...

Subjects