State whether each situation is a prepaid expense (PE), unearned revenue (UR), accrued revenue (AR) or an accrued expense (AE).

1. Unrecorded interest on savings bonds is $245.

2. Property taxes that have been incurred but that have not yet been paid or recorded amount to $300.

3. Legal fees of $1,000 were collected in advance. By year end 60 percent were still unearned.

4. Prepaid insurance had a $500 balance prior to adjustment. By year end, 40 percent was still unexpired.

5. Unpaid salaries earned by year end but not yet paid or recorded amounted to $1,200.

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Business

Crane

21 February, 00:52

State whether each situation is a prepaid expense (PE), unearned revenue (UR), accrued revenue (AR) or an accrued expense (AE).

1. Unrecorded interest on savings bonds is $245.

2. Property taxes that have been incurred but that have not yet been paid or recorded amount to $300.

3. Legal fees of $1,000 were collected in advance. By year end 60 percent were still unearned.

4. Prepaid insurance had a $500 balance prior to adjustment. By year end, 40 percent was still unexpired.

5. Unpaid salaries earned by year end but not yet paid or recorded amounted to $1,200.

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Answers (1)

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Josiah Mendez · Answer 1

1. Accrued Revenue of $ 245

2. Accrued expenses of $ 300

3. Unearned Revenue of $ 600

4. Prepaid expenses of $ 200

5. Accrued expenses of $ 1,200

Explanation:

1. The interest on savings bond is a revenue which has been earned but not received and is thus an accrued revenue.

2. The property expenses are an accrued expenses since these have been incurred but not paid.

3. The unearned portion of the legal fees received is an unearned revenue, since services have not been provided.

4. The unexpired portion of insurance is a prepaid expense

5. Salaried due nut not paid is an accrued expenses since services ahve been received.