On July 1 of the current calendar year. Olive Co paid 7700 cash for management services to be performed over a two year period beginning July 1. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 of the current year for Olive would include

Question

Dorian Allison

Business

2 July, 02:05

On July 1 of the current calendar year. Olive Co paid 7700 cash for management services to be performed over a two year period beginning July 1. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 of the current year for Olive would include

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Blaine Horn · Answer 1

Answer: d c

Prepaid expenses 7.700

Cash 7.700

Managment services expense 1.925

Prepaid expenses 1.925

Explanation:

Paid 1-jul 7700

Two Years 7.700 24 months

Monthly 321 month

Current Year 1.925 6 months

.

You must record the expense of the current year which is six months. (1.925)