On hand 1240 used adjusting entries deferred expense

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Unformatted text preview: perating expenses Supplies Expense 1,240 Business Transactions Business Recap, on Dec 1 NetSolutions paid insurance premium of $2,400. A= L+ Cash-2,400 Prepaid insurance +2,400 OE General Journal Date Description Credit Debit Prepaid insurance 2,400 Cash 2,400 A,E,D (Debit) L,R,C (Credit) Increase Debit Credit Decrease Credit Debit Adjustments – Deferred Expense Adjustments – Deferred Expense Adjustments On December 1, NetSolutions purchased insurance for 24 months at a cost of $2,400. Upon purchase, 1/12 Dr Prepaid Insurance Cr Cash 2,400 2,400 The adjusting entry, 31/12 Dr Insurance Expense Cr Prepaid Insurance 100 100 Adjusting entries – Deferred Expense Adjusting entries – Deferred Expense Statement of Financial Position as at December 31 Current Asset Prepaid Insurance 2,300 Statement of Comprehensive Income For the year ended December 31 Revenue less: operating expenses Insurance Expense 100 Adjustments – Depreciation Adjustments – Depreciation Adjustments Depreciation Depreciation •Fixed assets are a type of deferred expense. •A portion of the cost of the asset is recorded as an expense each month/year. Adjustments – Depreciation Adjustments – Depreciation Adjustments Depreciation Depreciation The depreciation for the month is $50. The adjusting entry, Dr Depreciation expense 50 Cr Accumulated depreciation 50 Statement of Financial Position as at December 31 Fixed Asset Office Equipment less: accumulated depreciation – Office Equipment 1,800 (50) --------1,750 Statement of Comprehensive Income For the year ended December 31 Revenue …… less: operating expenses Depreciation Expense – Office Equipment 50 Lesson 9 The Matching Concept and the Adjusting Process Thank you………… Thank...
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