07-18-2009, 01:40 PM
journey21 Wrote:The following is on a self check for straighterline....
At the beginning of the year, a business had a two-year, $2400 insurance policy on its office equipment On July 1, it purchased a three year, $3600 policy on a newly constructed building. Which of the following will e the December 31, year-end adjusting entry?
1) Insurance expense, debit $6000, prepaid insurance, credit $6000
2) Insurance expense, debit $1800, prepaid insurance, credit $1800
The answer is the second one....I have no idea where they got the $1800 from. Can someone please explain this problem to me?
......I am getting real discouraged as they will re bill me for this class on Thursday and I am not close to being done with it, yet....
One year's worth of a $2400, two year policy is $1200. 6 months' worth of a $3600, three year policy is $600. (3600/3 years, divided again by 2).
$1200 + $600 = $1800.
It would probably be helpful if they specified what exactly we were making the adjusting entry for, instead of just assuming we know they want total insurance payable. It's things like that that annoy me with SL.
[SIZE="1"]BS General Business, March 2010
CLEP College Algebra 51
CLEP Natural Sciences 63
CLEP Social Sciences and History 59
CLEP A&I Lit. 74
CLEP Intro to Sociology 67
CLEP Info Systems and Computer App. 58
CLEP Intro to Psychology 66
CLEP Intro to Business Law 64
CLEP Principles of Management 73
CLEP Principles of Marketing 63
CLEP Principles of Macroeconomics 61
CLEP Principles of Microeconomics 62
DSST Fundamentals of Counseling 49
DSST Principles of Supervision 61
DSST Substance Abuse 441 (Pass)
DSST Business Law II 67
DSST Management Information Systems 436
DSST Principles of Statistics 466
DSST Principles of Finance 435
DSST Civil War and Reconstruction 57
DSST Criminal Justice 431
ECE English Comp C :mad:
ECE World Population A
ECE Ethics, Theory and Practice A
ECE Organizational Behavior A
ECE Human Resource Management B
EC Business Policy B
Straighterline Accounting I B
Straighterline Accounting II B
CSU Pueblo Ops Management A
[/SIZE]
CLEP College Algebra 51
CLEP Natural Sciences 63
CLEP Social Sciences and History 59
CLEP A&I Lit. 74
CLEP Intro to Sociology 67
CLEP Info Systems and Computer App. 58
CLEP Intro to Psychology 66
CLEP Intro to Business Law 64
CLEP Principles of Management 73
CLEP Principles of Marketing 63
CLEP Principles of Macroeconomics 61
CLEP Principles of Microeconomics 62
DSST Fundamentals of Counseling 49
DSST Principles of Supervision 61
DSST Substance Abuse 441 (Pass)
DSST Business Law II 67
DSST Management Information Systems 436
DSST Principles of Statistics 466
DSST Principles of Finance 435
DSST Civil War and Reconstruction 57
DSST Criminal Justice 431
ECE English Comp C :mad:
ECE World Population A
ECE Ethics, Theory and Practice A
ECE Organizational Behavior A
ECE Human Resource Management B
EC Business Policy B
Straighterline Accounting I B
Straighterline Accounting II B
CSU Pueblo Ops Management A
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