Exercise Equipment Rental
Wednesday, August 31st, 2011Exercise Equipment Rental
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 fluidity with michelle austin FLUIDITY FITNESS BAR  US $166.25
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 Precor 956i ES Experience Series Treadmill US $2,695.00
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How to answer this accounting exercise?
On May 1 a business paid $4,800 for twelve month liability insurance policy. Then, on June 1 the same business entered into a two year rental contract for equipment for $12,000. Determine the following amounts:
a) prepaid insurance as of May 31
b) insurance expense for the month of June
c) prepaid equipment rental as of June 30
d) equipment rent expense for the month of June
a. 4800*(11/12) = 4400
b. 4800*(1/12) = 400
c. 12000*(23/24) = 11500
d. 12000*(1/24) = 500