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ABC Ltd. has a 30 June fiscal year end. ABC Ltd. purchased a one-year insurance policy of $12,000 on its office equipment on 1 February
ABC Ltd. has a 30 June fiscal year end. ABC Ltd. purchased a one-year insurance policy of $12,000 on its office equipment on 1 February 2016. Which of the following adjusting entries would be made by ABC Ltd. on 30 June 2016:
Select one:
a. Dr Prepaid Insurance$12,000
Cr Insurance Expense$7,000
Cr Cash$5,000
b. Dr Prepaid Insurance$5,000
Cr Insurance Expense$5,000
c. Dr Insurance Expense$5,000
Cr Prepaid Insurance$5,000
d. Dr Insurance Expense$5,000
Dr Insurance Payable$7,000
Cr Prepaid Insurance$12,000
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