Consider the following transactions for Huskies Insurance Company: a. Equipment costing $37,800...

Question:

Consider the following transactions for Huskies Insurance Company:

a. Equipment costing $37,800 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,300 per year.

b. On June 30, the company lends its chief financial officer $43,000; principal and interest at 6% are due in one year.

c. On October 1, the company receives $13,200 from a customer for a one-year property insurance policy. Deferred Revenue is credited.

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.

Adjusting entries:

Adjusting entries are journal entries posted at the end of the period in order to account for the actual revenue earned and expenses incurred for the period.

Answer and Explanation:

a. Equipment costing $37,800 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,300 per year.

AccountDebitCredi...

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Adjusting Entries: Definition, Types & Examples

from Introduction to Business: Homework Help Resource

Chapter 22 / Lesson 16
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