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A taxpayer pays $1,800 for six months insurance. The premium is paid on January 31, 20XX. Using the balance sheet approach prepare the account to
A taxpayer pays $1,800 for six months insurance. The premium is paid on January 31, 20XX.
Using the balance sheet approach prepare the account to reflect this transaction and prepare the journal entries for the end of the first month.
Prepaid insurance
| Date | Explanation | Debit | Credit |
|---|---|---|---|
For the end of the first month prepare these journals.
General journal
| Date | Account title and description | Debit | Credit |
|---|---|---|---|
Expired insurance
| Date | Explanation | Debit | Credit |
|---|---|---|---|
Prepaid insurance
| Date | Explanation | Debit | Credit | Balance |
|---|---|---|---|---|
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