Question
15. On July 1, 2016, Rotan Corporation paid $72,000 cash for a three year insurance premium. What adjusting entry should Rotan record on December 31,
15. On July 1, 2016, Rotan Corporation paid $72,000 cash for a three year insurance premium. What adjusting entry should Rotan record on December 31, 2016? Assume that no other adjusting entries have been recorded yet this year.
a. Insurance expense 72,000
Cash 72,000
b. Prepaid insurance 72,000
Cash 72,000
c. Insurance expense 12,000
cash 12,000
d. Insurance expense 12,000
Prepaid insurance 12,000
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Management Accounting
Authors: Anthony A. Atkinson, Robert S. Kaplan, S. Mark Young, Rajiv D. Banker, Pajiv D. Banker
3rd Edition
9780130101952
