Question

Consider the following transactions for Huskies Insurance Company: Equipment costing $34,200 is purchased at the beginning of the year for cash. Depreciation on the equipment is $5,700 per year. On June 30, the company lends its chief financial officer $37,000; principal and interest at 7% are due in one year. On October 1, the company receives $10,800 from a customer for a one-year property insurance policy. Deferred Revenue is credited. Required: For each item, record the necessary adjusting entry for Huskies Insurance at its year-end of December 31. No adjusting entries were made during the year. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Answer 1

Answer:

A. Dr Depreciation expense 5,700

Cr Accumulated depreciation 5,700

B. Dr Interest receivable 1,295

Cr Interest revenue 1,295

C.Dr Unearned revenue, 2,700

Cr Service revenue,2,700

Explanation:

Computation for the necessary adjusting entry for Huskies Insurance

Based on the information given we were that

Depreciation on the equipment was the amount of $5,700 per year which means that the Journal entry will be :

Dr Depreciation expense 5,700

Cr Accumulated depreciation 5,700

b. Based on the information given we were been told that they On June 30, the company went ahead to lends its chief financial officer the amount of $37,000 in which the principal and interest are 7% which are suppose to due in one year which means that the fair market Journal entry will be :

Dr Interest receivable 1,295

Cr Interest revenue 1,295

[(7%*37,000)/2)

c. Based on the information given we were been told that they On October 1, the company as well receives the amount of $10,800 which meansthat the Journal entry will be :

Dr Unearned revenue, 2,700

Cr Service revenue,2,700

(3/12*$10,800)