Question
Reviewing insurance policies revealed that a single policy was purchased on August 1, for one years coverage, in the amount of $4,800. There was no
Reviewing insurance policies revealed that a single policy was purchased on August 1, for one years coverage, in the amount of $4,800. There was no previous balance in the Prepaid Insurance account at that time. Based on the information provided:
A. Make the December 31 adjusting journal entry to bring the balances to correct. If an amount box does not require an entry, leave it blank.
Dec. 31 | Insurance Expense | ||
Prepaid Insurance |
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A. What is the monthly insurance expense? How many months of insurance expense must be recognized in the current year?
B. Show the impact that these transactions had. If an amount box does not require an entry, leave it blank.
Prepaid Insurance | ||
Beginning Balance | $ | |
Premium paid | ||
Subtotal | $ | |
Expired | ||
Prepaid/Unexpired | $ |
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