Introduction to Accounting Dr Dina Kerema
Fall 2018 TA Salma Adam
Adjusting Entries
Problem#2:
Prepare Adjusting entries on Dec 31 for the following transactions of
Fast Forward Company:
1. On Dec 1, 2011, the company paid a 24-month insurance policy
for $1,800. Record Adjusting Entry on Dec 31.
Date
Account Title & Explanation
Dr
Cr
*Dec 31
Insurance Expense
Prepaid Insurance
(To record adjusting entry of prepaid
insurance)
75
75
*Share of December = 1800 x (1/24) = 75
2. On Dec, 1, the company purchased equipment for $26,000. The
equipment depreciates by $4,500 per year Record the
depreciation of equipment on December 31
Date
Account Title & Explanation
Dr
Cr
*Dec 31
Depreciation Expense
Accumulated Depreciation
(To record monthly A/D)
375
375
* Depreciation = ($4500/12 months) = 375
