Answer:
a. Insurance Expense 16,450 Prepaid Insurance 16,450 Insurance expired. b. Insurance Expense 16,450 Prepaid Insurance 16,450 Insurance expired ($21,700 – $5,250).
Ex 3-6 Adjusting entries for prepaid insurance
The balance in the prepaid insurance account, before adjustment at the end of the year, is $21,700. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $16,450; (b) the amount of unexpired insurance applicable to future periods is $5,250.
Answer:
a. Insurance Expense 16,450 Prepaid Insurance 16,450 Insurance expired. b. Insurance Expense 16,450 Prepaid Insurance 16,450 Insurance expired ($21,700 – $5,250).
Answer:
a. Insurance Expense 16,450 Prepaid Insurance 16,450 Insurance expired. b. Insurance Expense 16,450 Prepaid Insurance 16,450 Insurance expired ($21,700 – $5,250).