Lawson Delivery Initially Records All Prepaid Expenses as Expenses and All

question 132

Essay

Lawson Delivery initially records all prepaid expenses as expenses and all unearned revenues as revenues. Given the following information, prepare the necessary adjusting entries at year end, December 31, 2019.
a)On January 3, 2019, $3,500 of supplies were purchased. A count revealed $700 still on hand at December 31, 2019.
b)On January 4, 2019, a $3,150 payment was made to an insurance agency for two and a half years of insurance.
c)On June 30, 2019, received nine months' rent in advance from a tenant, $8,100.
d)On August 1, 2019, received six months' rent in advance from a tenant, $4,800.

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Definitions:

Formal Concepts

Abstract ideas or categories defined by a set of rules or characteristics that objects or individuals must possess to be included in the category.

Prototypes

A cognitive representation of a typical member of a category, used to enhance memory and identification by providing examples that epitomize common features within that category.

Representativeness Heuristic

A thinking strategy based on how closely a new object or situation is judged to resemble or match an existing prototype of that object or situation.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.