Prepare adjusting journal entries at year end, December 31, 2019, based on the following…

Prepare adjusting journal entries at year end, December 31, 2019, based on the following supplemental information. a. The equipment has a useful life of 20 years with no salvage value. (Straight-line method being used.) b. Interest accrued on the bonds payable is €15,000 as of 12/31/19. c. Expired insurance at 12/31/19 is €12,000. d. The rent payment of €180,000 covered the six months from November 30, 2019 through May 31, 2020. e. Salaries and wages incurred but unpaid at 12/31/19, €22,000. Question 4: (6 Points) (A1, D3) Part A (2 Points) Cost as a basis of accounting for assets has been severely criticized. What defense can you build for cost as the basis for financial accounting? Part B. (2 Points) A concept is a group of related ideas. Matching could be considered a concept because it includes ideas related to expense recognition. Briefly explain the ideas in expense recognition. Part C (2 Points) What is the difference between principles-based and rules-based accounting rules? Are IFRS more principles-based than U.S. GAAP? Explain. (Chapter 1)

 

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