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One June 1 a company purchased a one-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance
One June 1 a company purchased a one-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:
a) debit prepaid insurance, $1,800;credit cash $1,800
b) debit prepaid insurance $900;credit insurance expense $900
c) debit prepaid insurance, $360;credit insurance expense, $360
d) debit insurance expense, $1,050;credit prepaid insurance $1,050
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