Question : 169.On November 1, Jovel Company loaned another company $100,000 at : 1236840

 

169.On November 1, Jovel Company loaned another company $100,000 at a 6.0% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company’s annual accounting period ends on December 31. The adjusting entry needed on December 31 is:   

A.No entry required.

B.Debit Interest Expense, $5,000; credit Interest Payable, $5,000.

C.Debit Interest Expense, $1,000; credit Note Payable, $1,000.

D.Debit Interest Receivable, $500; credit Interest Revenue, $500.

E.Debit Interest Receivable, $1,000; credit Interest Revenue, $1,000.

170.On December 1, Casualty Insurance Company borrowed $50,000 at a 6.0% interest rate from One Mutual Bank. The note payable plus interest will not be paid until April 1 of the following year. The company’s annual accounting period ends on December 31. The adjusting entry needed on December 31 is:   

A.No entry required.

B.Debit Interest Expense, $250; credit Interest Payable, $250.

C.Debit Interest Expense, $250; credit Note Payable, $250.

D.Debit Interest Payable, $1,000; credit Interest Expense, $1,000.

E.Debit Interest Expense, $1,000; credit Interest Payable, $1,000.

171.Which of the following statements is incorrect?    

A.An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

B.An adjusted trial balance is a list of accounts and balances prepared after adjusting entries have been recorded and posted to the ledger.

C.Each trial balance amount is used in preparing the financial statements.

D.Financial statements should be prepared directly from information in the unadjusted trial balance.

E.Financial statements can be prepared directly from information in the adjusted trial balance.

172.On December 31, 2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is:   

A.Debit Utilities Expense $215; credit Accounts Payable $215.

B.Debit Accounts Payable $215; credit Utilities Expense $215.

C.Debit Prepaid Utilities $215; credit Cash $215.

D.Debit Utilities Expense $215; credit Prepaid Utilities $215.

E.Debit Prepaid Utilities $215; credit Accounts Payable $215.

173.On December 31, 2015 Winters Company received a $385 bill for the purchase of supplies in December that it will not pay for until January 15. The adjusting entry needed on December 31 to accrue this cost is:   

A.Debit Supplies $385; credit Accounts Payable $385.

B.Debit Accounts Payable $385; credit Supplies $385.

C.Debit Accounts Payable $385; credit Cash $385.

D.Debit Supplies Expense $385; credit Cash $385.

E.Debit Supplies Expense $385; credit Supplies $385.

174.On December 31, 2015 Carmack Company’s Prepaid Insurance account had a balance before adjustment of $6,000. The insurance was purchased on July 1 of the same year for one year of insurance coverage. The adjusting entry needed on December 31 is:   

A.Debit Prepaid Insurance $6,000; credit Cash $6,000.

B.Debit Insurance Expense $3,000; credit Accounts Payable $3,000.

C.Debit Insurance Expense $3,000; credit Prepaid Insurance $3,000.

D.Debit Cash $6,000; credit Prepaid Insurance $6,000.

E.Debit Insurance Expense $6,000; credit Accounts Payable $6,000.

175.On December 31, 2015 Winters Company’s Prepaid Rent account had a balance before adjustment of $6,000. Three months’ rent was paid in advance on December 1. The adjusting entry needed on December 31 is:   

A.Debit Prepaid Rent $6,000; credit Cash $6,000.

B.Debit Rent Expense $2,000; credit Accounts Payable $2,000.

C.Debit Rent Expense $2,000; credit Prepaid Rent $2,000.

D.Debit Cash $2,000; credit Prepaid Rent $2,000.

E.Debit Rent Expense $6,000; credit Accounts Payable $6,000.

 

 

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