Question

Exercise 3.20 Cullumber Company has the following balances in selected accounts on December 31, 2020. Service Revenue Insurance Expense Supplies Expense $39,000 5,100 2,600 2 All the accounts have normal balances. Cullumber Company debits prepayments to expense accounts when paid, and credits uneamed revenues to revenue accounts when received. The following information below has been gathered at December 31, 2020. 1. Cullumber Company paid $5,100 for 12 months of insurance coverage on June 1, 2020, On December 1, 2020, Cullumber Company collected $39,000 for consulting services to be performed from December 1, 2020, through March 31, 2021. 3. A count of supplies on December 31, 2020, indicates that supplies of $800 are on hand. Prepare the adjusting entries needed at December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 No. 1 2. Dec. 31 3. Dec. 31 Click if you would like to Show Work for this question: Open Show Work SEE ON

Answer 1

Adjusting entries

Date	Particulars	Debit ($)	Credit ($)
December 31, 2020	Prepaid insurance [$5100 X (5/12 months)]	2125
	To insurance expense		2125
	(Being prepaid insurance recorded)
December 31, 2020	Service revenue [$39000 X (3/4 months)]	29250
	To unearned service revenue		29250
	(Being unearned service revenue recorded)
December 31, 2020	Supplies	800
	To Supplies expense		800
	(Being supplies at hand transferred to supplies account)

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