On May 1 a business paid $4,800 for twelve month liability insurance policy. Also on June 1 the same business entered into a twelve month rental contract for equipment for $12,000. Determine the following amounts: (a) prepaid insurance as of May 31, (b) prepaid rent as of June 30 (c) insurance expense for May and rent expense for June.
2006-10-10 12:07:13 · 3 answers · asked by dima39402 1 in Education & Reference ➔ Homework Help
(a) preparid insurance for 11 months = 4800 per year/12months = $400 a month and $400/months x 11 months = $4,400 of prepaid insurance (an asset).
(b) Equipment rental = $12,000 per year = $1,000 per month so
$1,000/month x 11 months = $11,000 prepaid equipment rental (an asset). (c) insurance expense for May = $400 (4800/12). Rent expense for June = $1,000 ($12,000/12).
2006-10-10 12:15:17 · answer #1 · answered by urbancoyote 7 · 0⤊ 0⤋
4800/12=400per month
1200/12=100 per month
a=4400
b=1100
c=400 and 100
2006-10-10 12:13:39 · answer #2 · answered by Aaron A 5 · 0⤊ 0⤋
u haven't got a calculator.
2006-10-10 12:10:50 · answer #3 · answered by Nora G 7 · 0⤊ 0⤋