Finance pays for a 1-year insurance policy commencing on 1 January in cash. The policy costs $24 000. The entitys monthly reporting date is 31 January.

Required:

1) Prepare the general journal entry to record the insurance payment on 1 January.

2) Prepare the adjusting journal entry on 31 January.

3) Post the above two journals to the Prepaid Insurance ledger account (the T-account is provided in the response template section) and calculate the closing balance as at 31 January. (Hint: do not provide both c/d and b/d balances. Just indicate the closing balance at the normal balance side.)