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The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months.
The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is:
Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400. | |
Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400. | |
Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200. | |
Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200. | |
Debit Cash, $4,800; Credit Prepaid Insurance, $4,800. |
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