on july 12017 major co pays 14400 to cruz WileyPLUS weygandt

WileyPLUS weygandt, Acounting Principes, 12 am 2 On July 1.2017, Major C pays $14,400 to C 2333 ype here to ?

Solution

IN THE BOOKS OF MAJOR COMPANY Journal Entries Date Account Title and explanation Debit Credit Prepaid Insurance $14,400 JULY, 01       To Cash $14,400 Dec , 31 Insurance Expenses ($ 14,400 /3 years ) X6/12 $2,400        To Prepaid insurance $2,400 Insurance Expenses for 3 years = $14,400 One year Insuance =                      4,800.00 For Half year = $ 4,800 / 2 =                      2,400.00                          12,000 IN THE BOOKS OF INSURANCE CO. UNEARNED SERVICE REVENUE Dec 31, 2017 Service Revenue                                $ 2,400 July 01, 2017 Cash Recd .                        $ 14,400 Dec 31, 2017 Closing Balance                                $ 12,000 Total                                                        $ 14,400 Total                                        $ 14,400 SERVICE REVENUE Dec 31, 2017 Closing Balance                                $ 2,400 Dec 31, 2017 Unearned Ser. Revenue   $ 2,400 Total                                                        $ 2,400 Total                                        $ 2,400