GB 518 RANK Career Path Begins/gb518rank.com GB 518 RANK Career Path Begins/gb518rank.com | Page 14

Question 18. Question :
On January 1 a company
purchased a five-year insurance policy for $1,800 with coverage
starting immediately. If the purchase was recorded in the
Prepaid Insurance account and the company records adjustments
only at year-end, the adjusting entry at the end of the first year
is:
Debit Prepaid Insurance, $1,800; credit
Cash, $1,800
Debit Prepaid Insurance, $1,440; credit
Insurance Expense, $1,440
Debit Prepaid Insurance, $360; credit
Insurance Expense, $360
Debit Insurance Expense, $360; credit
Prepaid Insurance, $360
Debit Insurance Expense, $360; credit
Prepaid Insurance, $1,440

Question 19. Question :
A company pays each of its two
office employees each Friday at the rate of $100 per day each
for a five-day week that begins on Monday. If the monthly
accounting period ends on Tuesday and the employees worked
on both Monday and Tuesday, the month-end adjusting entry to
record the salaries earned but unpaid is: