Adjusting entries for prepaid insurance?
The balance in the prepaid insurance account, before adjustment at the end of the year, is $ 14,800. Journalize the adjusting entry required under each of the following alternatives for determaning the amount of the adjustment: (a) the amount of insurance expired during the year is $ 11,200; (b) the amount of unexpired insurance applicable to future periods is $ 3,600.......accounting problem
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Answer by JKRB
Both of these alternatives are saying the same thing.
(a) the amount of insurance expired during the year is $ 11,200
Dr Insurance Expense 11,200
Cr Prepaid Insurance 11,200
(b) the amount of unexpired insurance applicable to future periods is $ 3,600
Dr Insurance Expense 11,200
Cr Prepaid Insurance 11,200
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