Prepare adjusting entries for prepaid expenses

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Unformatted text preview: at is recorded as an asset because service or benefit will be received in the future. Cash Payment BEFORE Expense Recorded Prepayments often occur in regard to: insurance supplies Advertising rent Chapter 3-16 building purchases equipment purchases LO 5 LO Prepare adjusting entries for deferrals. Prepare Adjusting Entries for “Prepaid Expenses” Adjusting Entries for “Prepaid Expenses” Prepaid Expenses Costs that expire either with the passage of time or through use. Adjusting entries (1) to record the expenses that apply to the current accounting period, and (2) to show the unexpired costs in the asset accounts. Chapter 3-17 LO 5 LO Prepare adjusting entries for deferrals. Prepare Adjusting Entries for “Prepaid Expenses” Adjusting Entries for “Prepaid Expenses” Illustration 3-4 Adjusting entries for prepaid expenses Increases (debits) an expense account and Decreases (credits) an asset account. Chapter 3-18 LO 5 LO Prepare adjusting entries for deferrals. Prepare Adjusting Entries for “Prepaid Expenses” Adjusting Entries for...
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