Acc421 Intermediate Accounting: E3-20 When the accounts of Constantine Inc. are examined

Acc421 Intermediate Accounting

E3-20 (Adjusting and Reversing Entries)
When the accounts of Constantine Inc. are examined, the adjusting data listed below are uncovered on December 31, the end of an annual fiscal period.
1. The prepaid insurance account shows a debit of $6,480, representing the cost of a 2-year fire insurance policy dated August 1 of the current year.
2. On November 1, Rental Revenue was credited for $3,240, representing revenue from a subrental for a 3-month period beginning on that date.
3. Purchase of advertising materials for $880 during the year was recorded in the Advertising Expense account. On December 31, advertising materials of $337 are on hand.
4. Interest of $837 has accrued on notes payable.
Instructions:
Prepare in general journal form: (a) the adjusting entry for each item and (b) the reversing entry for each item where appropriate. (If no journal entry is required, please choose No entry as the description and put 0 as the amount.)
Powered by