On the SOFP dated 31/01/2020 prepaid expenses relating to insurance were 400. During the period 01/02/2020 to 31/01/2021 (i.e. the current accounting period) the company paid 3,800 for insurance. 500 of this amount relates to insurance for the 1st quarter of the next accounting period.

Firstly, figure out the insurance expense for the current accounting period.

Secondly, record this transaction using the expanded accounting equation.

Assets

Expenses

Equity

Revenue

Liabilities