At January 31, 2023 Cy needs to update his accounts before preparing financial statements to review Mookie The Beagle Concierge performance for its first month of operations. Cy has asked for your assistance in preparing the adjusting entries. Mookie The Beagle Concierge will be using the accrual basis of accounting.

In January, Mookie The Beagle Concierge purchased $300 of liability insurance to cover a 3-month period from Phoenix Insurance. So at the end of the accounting period on January 31, 1 month of insurance has expired @ $100 ($300 3 months = $100 per month). The 2 months of unexpired insurance is Prepaid Expenses: Insurance, an asset account with future benefit. Since Mookie The Beagle Concierge recorded the entire $300 as Insurance: Liability Insurance Expense, an adjusting entry is needed to bring accounts up to date at January 31.

QBO CROSSCHECK

Before proceeding, crosscheck your Insurance: Liability Insurance Expense account to verify that it has a balance of $300. (Select Reports > Trial Balance > Report period: 01/31/2023.)

Required: