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On December 1, 2017, ABC Company paid its vendor $24,000 for its annual license, which...

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Accounting

On December 1, 2017, ABC Company paid its vendor $24,000 for its annual license, which covers the twelve-month period beginning on January 1, 2018. Assume ABC Company prepares monthly financial statements at the end of each calendar month.

1. What journal entry should ABC Company record on December 1, 2017?

2. What journal entry should ABC Company record for the accounting license for the month ending January 31, 2018?

For questions 3-4, assume now the same factors as above, but ABC Company did not pay the license vendor until February 1, 2018.

3. What is the journal entry that should be recorded as of December 31, 2017?

4. What is the journal entry that should be recorded as of January 31, 2018?

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