On July 1 of the current calendar year, Peach Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. Peach 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 Peach would include:

On July 1 of the current calendar year, Peach Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. Peach 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 Peach would include:

The Extra Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Extra to record the building on its records at $500,000?

Marcus Furs purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the equipment is sold on July 1, Year 5 for $20,000, the journal entry to record the sale will include a:

Dean’s Dance Studio received $3,000 from a customer for services provided. Dean’s general journal entry to record this transaction will be:

Foggy Bottom LLC records adjusting entries at its December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, at which time $30,000 will be paid. Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.

Dover Company is required by law to collect and remit sales taxes to the state. If Dover has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

Stanton, Inc. purchased a depreciable asset for $22,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset’s salvage value is $2,000, Stanton, Inc.  should recognize depreciation expense in Year 2 in the amount of:

On July 1, Silver Spurs Hotel borrowed $250,000 cash by signing a 10-year, 8% installment note requiring equal payments each June 30 of $37,258. What is the journal entry to record the first annual payment?

On January 1 of Year 1, Boing Airlines issued $3,500,000 of 7% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,197,389 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized at a rate of $10,087 every six months. The amount of interest expense recognized by Boing Airlines on the bond issue in Year 1 would be: