HBX Financial Accounting module 4

Apple decides to allocate $950 of the purchase price toward the phone itself, and $50 toward the software updates they will provide over the next year. Before the sale, the phone was in Apple’s inventory valued at $500. Create a journal entry for the date of the sale, October 1, 2018. - In this case, Apple needs to first note the receipt of cash and the loss of inventory by debiting Cash for $1000 and crediting Inventory for $500. Then they need to record the revenue: debit Cost of Goods sold by $500, credit Revenue for $950, and then credit Deferred Revenue (the software updates) for $50. On April 1, 2014, Apex Insurance Company receives payment of $6,000 for an annual property insurance policy from one of their corporate customers. How would Apex record the revenue related to this policy for the month of September, 2014? - The correct answer is to debit Deferred Revenue for $500 and credit Revenue for $500 as Apex has earned one month's worth of revenue during September. As part of the 2013 year end close, your company evaluates the total pension obligation and determines that it needs to be increased to properly reflect the obligation at the end of the year. The shortfall is estimated to be $100,000. What would the journal entry look like to record this obligation? - The correct answer is to debit Pension Benefit Expense for $100,000 and credit Pension Obligation (a liability account) for $100,000. On January 1, 2013, Company D rented a warehouse for two years. On December 31, 2013, the accountant of Company D recorded a journal entry as follows: Which of the following best describes the transaction that occurred on December 31, 2013, that would lead to this journal entry? - - Company D didn’t pay $15,000 for warehouse rental but recognized $15,000 of rent expense. By December 31, 2013, half of the prepaid rent expense was amortized, and $15,000 of rent expense was incurred. The cash was paid previously.