Adjusting Entries for Prepaid Insurance

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:

If an amount box does not require an entry, leave it blank.

a$.$ The amount of unexpired insurance applicable to future periods is $$4,800.$

Prepaid Insurance $$

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Set up a Prepaid Insurance T$-$account. Consider each situation by recalling that prepaid insurance expires and becomes an expense with the passage of time. The insurance expense is the amount needed to amive at the given ending

balance. Complete your adjusting entry by making sure that the entry affects at least one income statement account and one balance sheet account.

b$.$ The amount of insurance expired during the year is $$30,70.$

Prepaid Insurance $$