Roland Company began operations on December 1 and needs assistance in preparing December 31 financial statements, including its year-end adjustments. The Tableau dashboard is provi... Roland Company began operations on December 1 and needs assistance in preparing December 31 financial statements, including its year-end adjustments. The Tableau dashboard is provided to assist in the work. December 1 purchased insurance for $2400 prepaid a 24 month insurance policy coverage starting immediately on cash. December 7 purchased supplies for $2000 cash. December 31 agreed to work for Telo over the next 30 days and payment is to be received when the work is completed on January 12. December 24 received $4000 cash in advance to perform work for ABX over the next 4 weeks. Supplies remaining at year end $700 and wages earned by workers but not paid by the year end $500. 1. Record (a) the prepayment of insurance on December 1 and (b) the adjusting journal entry for prepaid insurance on December 31. 2. Record (a) the advance payment from ABX and (b) the adjusting journal entry to unearned revenue on December 31.
Understand the Problem
The question is asking to prepare journal entries for Roland Company's financial transactions for the month of December, particularly focusing on prepaid insurance and advance payments. We need to record the initial payments and the necessary adjustments at year-end for insurance and unearned revenue.
Answer
1(a) Debit Prepaid Insurance $2,400, Credit Cash $2,400; 1(b) Debit Insurance Expense $100, Credit Prepaid Insurance $100; 2(a) Debit Cash $4,000, Credit Unearned Revenue $4,000; 2(b) Debit Unearned Revenue $1,000, Credit Revenue $1,000.
The final answers are: 1(a) Debit Prepaid Insurance $2,400, Credit Cash $2,400; 1(b) Debit Insurance Expense $100, Credit Prepaid Insurance $100; 2(a) Debit Cash $4,000, Credit Unearned Revenue $4,000; 2(b) Debit Unearned Revenue $1,000, Credit Revenue $1,000.
Answer for screen readers
The final answers are: 1(a) Debit Prepaid Insurance $2,400, Credit Cash $2,400; 1(b) Debit Insurance Expense $100, Credit Prepaid Insurance $100; 2(a) Debit Cash $4,000, Credit Unearned Revenue $4,000; 2(b) Debit Unearned Revenue $1,000, Credit Revenue $1,000.
More Information
This question helps in understanding adjusting entries, which are crucial for ensuring that the financial statements reflect the true financial position of a company at year-end.
Tips
Always ensure to calculate the correct proportion of earned or used amounts for adjustments based on the time period provided.
