Adjusting entries for prepaid insurance Obj. 3 The prepaid insurance account had a balance of $3,000 at the beginning of the year. The account was debited for $32,500 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:

(a) the amount of unexpired insurance applicable to future periods is $4,800;

(b) the amount of insurance expired during the year is $30,700.

AppendixLO1