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For each separate case, record the necessary adjusting entry.
a. On July 1, Lopez Company paid $3,200 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31.
b. Zim Company has a Supplies account balance of $9,000 at the beginning of the year. During the year, it purchased $4,000 of supplies. As of December 31, a physical count of supplies shows $1,800 of supplies available.
Prepare the adjusting journal entry to correctly report the balance of the Supplies account and the Supplies Expense account as of December 31.

Respuesta :

Answer and Explanation:

The Journal entries are shown below:-

Supplies expense Dr, $11,200 ($9,000 + $4,000 - $1,800)

        To Supplies $11,200

(Being supplies expense is recorded)

Here we debited the supplies expenses as and we credited the supplies as it increased the expense and also increased the assets so that proper recording could be done

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