Question

 Consider the following transactions for Huskies Insurance Company.

 1. Equipment costing $33,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $5,500 per year.

 2. On June 30, the company lends Its chief financial officer $35,000; principal and Interest at 6% are due In one year.

 3. On October 1, the company received $10,000 from a customer for a one-year property Insurance policy. Deferred Revenue Is credited.

 Required:

 For each Item, record the necessary adjusting entry for Huskies Insurance at Its year-end of December 31. No adjusting entries were made during the year. (If no entry Is required for a particular transaction/event, select "No Journal Entry Required" In the first account field. Do not round Intermediate calculations.)

Answer 1

Journal

Event	Date	Account Title and Explanation	Debit	Credit
1	December 31	Depreciation expense	5,500
		Accumulated depreciation - Equipment		5,500
		(To record depreciation expense)
2	December 31	Interest receivable	1,050
		Interest revenue		1,050
		(To record interest revenue earned)
3	December 31	Deferred revenue	2,500
		Revenue		2,500
		(To record revenue earned)

2.

Interest receivable on Dec 31 = Note receivable x Interest rate x 6/12

= 35,000 x 6% x 6/12

= $1,050

3.

Revenue for 1 year = $10,000

Revenue for 3 months (From Oct 1 to Dec 31) = 10,000 x 3/12

= $2,500