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please help correct these errors: Trainer feedback Question 2 - Prepaid insurance - General ledger account. Top line $4,400 should be debited. As you have
please help correct these errors:
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Question 2 - Prepaid insurance - General ledger account. Top line $4,400 should be debited. As you have split the premium between insurance expense and prepaid insurance when you recorded the payment an entry for $400 is not required. Closing balance should be $4,400 debit - remove brackets. Question 3 - 2nd bad debt account - Opening balance should be $5,700 debit. Second row - Remove the debit entry of $5,700.
STEP 2: Insurance Prepayment Instructions XYZcom pays $4,800 for 12 months of insurance in July. Instead of recording the whole amount against July's expenses, show the expense equally across the periods for which the premium was paid (i.e., $400 expense in all months). Record the insurance payment and allocate the expense equally across the 12-month period. GL7 General Journal (showing the entire transaction) Date Description Ref Debit Credit 31-Jul- $400 XX Insurance Expense 1945 31-Jul- XX Prepaid insurance 1945 $4,400 21- Inl- PA-P1 PA-P XX 6010 Insurance (showing the Insurance Expense account) Date Description Ref Debit Credit Balance 31-Jul- Insurance 1945 $400 $400 XX expense 1945 Pre-paid Insurance (showing the Prepaid Insurance account) Date Description Ref Debit Credit Balance 31-Jul- 1945 $4,400 XX prepaid ($4,800) inSUPRAS 31-Jul- Insurance 1010 $400 ($4,400) XX expense Evidence Required Three completed tablesStep by Step Solution
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