Accrual Accounting and Adjusting Entries
"Show all calculations. Journal entries must be in proper format."
The following information is available for Samford Company:
July 1 acquired a building by borrowing $375,000 from the Tiger Bank. Depreciation expense per year is $12,500. The note payable will be due in full in ten years. Interest is payable annually on July 1. The interest rate of the note is 10%.
Sept. 1 Paid cash in the amount of $12,000 for a one-year property insurance policy.
Nov. 1 Received $240,000 in cash from customers for services to be provided evenly during the next six months.
A) Prepare the necessary adjusting journal entries at December 31.
B) For each of the adjusting entries, indicate which of the following type of entry was recorded: accrued expense, accrued revenue, deferred expense or deferred revenue.