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.

Expert Solution

Journal entries
Particulars	Debit	Credit
insurance expenses (11520/36)	320
prepaid insurance		320
(to record ajusting entry)

advertising expenses (31680/24)	1320
prepaid advertising		1320
(to record advertisment exp)

ekkarill92 answered 2 years ago

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