accounting

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?
2. 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:
2. 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