Question

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Exercise 2-10 The following are transactions recorded by Indigo Corporation during the current year. 1. Ordinary operating maintenance on equipment was recorded as follows: Equipment 3,700 Accounts Payable 2. Indigo received an advance on a custom order for merchandise that will be shipped during the next accounting year. Cash 3,700 19,200 Sales Revenue 19,200 3. Indigo Corporation is holding inventory on consignment for Rubber Ltd. Indigo will only pay Rubber when a sale is made to a customer. Indigo made the following entry when it received the inventory: Inventory 17,100 Accounts Payable 4. On the last day of the accounting period, a 12-month insurance policy was purchased. The insurance coverage is for the next accounting year. Insurance Expense 17,100 5,200 Cash 5,200

Answer 1

No	Account titles and Explanations					debit	credit
1	Repairs and maintenance					3,700
	accounts payable						3,700
2)	Cash					19,200
	unearned sales revenue						19,200
3)	No Entry					0
4)	prepaid insurance					5,200
	cash						5,200