ACCT: Journal Entries/Adjusting Entries

On July 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the first year ended December 31?

$1,200

A company earned $3,000 in net income for October. Its net sales for October were $10,000. Its profit margin is: ___%

30%

When the stockholders receive a dividend, how would this affect the equity of a business?

Assets are decreased and equity is decreased.

R&R Programming pays a $900 supply bill that it had received earlier in the month.

DEBIT accounts payable CREDIT cash

A law firm billed a client $1,800 for work performed in the current month.

DEBIT accounts receivable CREDIT legal fees revenue

Callie Company performed $800 worth of services for a client. The client paid $100 immediately, but promised to pay the balance next month.

DEBIT cash DEBIT accounts receivable CREDIT service revenue

A business paid $40 in dividends.

DEBIT dividends CREDIT cash

Lyons Company paid dividends of $1,000.

DEBIT dividends CREDIT cash

For the current year, a business has earned (but not recorded or received) $200 of interest from investments.

DEBIT interest receivable CREDIT interest revenue

Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies showed $105 of unused supplies available.

DEBIT office supplies expense $254 CREDIT office supplies $254

On July 1 Plum Co. paid $7,500 cash for management services to be performed over a two-year period. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Plum should record:

DEBIT prepaid expense CREDIT cash

Lenten Company paid $1,200 for insurance coverage for the next year.

DEBIT prepaid insurance CREDIT cash

$1,000 of supplies were purchased at the beginning of the month. $300 were used during the month. (the supplies account was increased at the time of the initial purchase.)

DEBIT supplies expense for $300. CREDIT supplies for $300.

If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is:

DEBIT unearned legal fees CREDIT legal fees earned

$1,000 of cash was received in advance of performing services. By the end of the period, $300 had not yet been earned. (The unearned revenue account was increased at the time of the initial cash receipt.)

DEBIT unearned revenue for $700. CREDIT service revenue for $700.

A business pays $500 for rent. How would this payment affect the equity of a business?

Expenses are increased, so equity is decreased.

A business earns $2,800 cash for services performed. How would this receipt affect the total equity of a business?

Revenues would be increased, so equity is increased.

purchase office supplies on credit --> CREDIT to:

accounts payable

A company borrowed $4,000 from the bank at an interest rate of 9%. By the end of the accounting period, the loan had been outstanding for 30 days. --> _______ interest expense for $___.

debit for $30

A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the prepaid insurance account was increased for the payment. --> _______ insurance expense for $____.

debit for $300

For the current year, Bubbles Office Supply had earned $600 of interest on investments. As of December 31, none of this interest had been received or recorded. --> _________ interest receivable for $_____.

debit for $600

$800 of supplies were purchased at the beginning of the month and the supplies account was increased. As of the end of the period, $200 of supplies still remain. --> Supplies expense would be _____________ for $_____.

debited for $600