Hoffman, Incorporated adjusts its books each month but closes its books at the end of...
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Accounting
Hoffman, Incorporated adjusts its books each month but closes its books at the end of the year. The companys unadjusted trial balance at March 31 is as follows:
Debit
Credit
Cash
$ 10,920
Accounts Receivable
9,620
Supplies
1,300
Prepaid Insurance
3,120
Equipment
26,000
Accumulated Depreciation: Equipment
$ 10,400
Unearned Service Revenue
6,500
Capital Stock
5,200
Retained Earnings
23,400
Dividends
1,560
Service Revenue Earned
16,510
Salaries Expense
7,800
Utilities Expense
390
Rent Expense
1,300
Totals
$ 62,010
$ 62,010
On March 1, Hoffman paid in advance for four months' insurance. The necessary adjusting entry at March 31 includes which of the following?
Multiple Choice
A credit to Prepaid Insurance for $2,340.
A debit to Prepaid Insurance for $2,340.
A credit to Prepaid Insurance for $780.
A debit to Prepaid Insurance for $780.
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