Luv Care is owned and operated by Debbie Gonalez, the sole stockholder.During May 2011 Luv Care enterend into the following transactions.
a. Debbie invested 20,000$ in Luv Care in exchange for Cap Stock
b. paid 7,200 on May 1 for an insurance premium on a 1 year policy
c. purchased supplies on account 1,200
d.received fees of 32,000 during may
e.paid expenses as follows: 8,000 wages, rent 2,500, utilities, 1,000 and misc. 850
f. paid dividends, 3000
Then the next one is: record AJE at the end of may to record the insurance expense and supplies expense. there were 650 of supplies on hands as may 31. identify the AJE for insurance and supplies.
Can you explain how you figure out the AJEs please?