Question

For each separate case, record the necessary adjusting entry.

1. On July 1, Lopez Company paid $1,800 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31.
2. Zim Company has a Supplies account balance of $6,200 at the beginning of the year. During the year, it purchased $2,600 of supplies. As of December 31, a physical count of supplies shows $1,100 of supplies available.

Answer 1

Item 1

Debit : Insurance $1,800

Credit : Prepaid insurance $1,800

Item 2

Debit : Supplies expense $7,700

Credit : Supplies $7,700

Step-by-step explanation: