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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Business

Carlie Francis

8 March, 02:57

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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Paula Bean · 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)