accounting

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If you purchase $6,000 worth of supplies, how would you record it?

Debit Materials $5000

Credit Accounts Payable $1000

Debit Materials $6000

Credit Accounts Payable $6000

Debit Materials $2500

Debit Cash $2500

Credit Materials $5000

Debit Accounts Payable $5000

Credit Cash $5000

6 points   

QUESTION 2

  1. If you prepay insurance for an entire year ($3500), how would you record that payment?
  3. Debit: Cash $3500
    Credit: Prepaid Insurance $3500

    Debit: Prepaid Insurance $3500
    Credit: Cash $3500

    Debit: Supplies $3500
    Credit: Cash $3500

    Debit: Cash $3500
    Credit: Expenses $3500

6 points   

QUESTION 3

  1. To record each month that the prepaid insurance is actually used in the example above, your monthly entry would be:
  3. Debit: Insurance Expense $291.67
    Credit: Prepaid Insurance $261.97

    Debit: Prepaid Insurance $291.67
    Credit: Insurance Expense $261.97

    Debit: Expenses $291.67
    Credit: Cash $261.97

    Debit: Cash $291.67
    Credit:Expenses $261.97