question archive Lerwick Store paid € 3,600 for 2-years insurance policy
Lerwick Store paid € 3,600 for 2-years insurance policy
Subject:AccountingPrice:2.84 Bought3
Lerwick Store paid € 3,600 for 2-years insurance policy. In addition, purchased a Land by signing €10,000, 6%,16 - month note payable. 16- Make the necessary adjusting entries on 31/Dec./2017 related to the transaction occurred on Dec. 2 (for Lerwick store) ET
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| Date | particulars | Debit | credit |
| Dec-02 | insurance expense dr. | 3600 | |
| To cash | 3600 | ||
| (Insurance paid for 2 years) | |||
| Dec 02 | Land dr. | 10000 | |
| To note payable | 10000 | ||
| (Being land purchased) | |||
| Dec31 | prepaid imsurance dr. | 3450 | |
| To insurance | 3450 | ||
| Being prepaid insurance booked (3600 -3600*1/12*1/2) | |||
| Dec31 | interest dr. | 100 | |
| Interest payable | 100 | ||
| (Interest payable on note due (10000*6%*1/6) |
