ABC Company pays $ 2,400 on Jan 1 for a 1 year insurance policy. For the...
ABC Company pays $ 2,400 on Jan 1 for a 1 year insurance policy. For the adjusting journal entry at Mar 31, which statement is correct?
Prepaid insurance is debited for $600
Prepaid insurance is credited for $600.
Insurance expense is debited for $800.
Insurance expense is credited for $800.
Homework Answers
Insurance expense for 3 months from Jan to Mar = $2,400 X 3/12 = $600
Prepaid insurance has a debit balance when $2,400 is paid.
Prepaid insurance is reduced by crediting $600 to record insurance expense till March.
Prepaid insurance is credited for $600.
2nd option.
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Question 1:
The prepaid insurance balance reflects a 12-month insurance
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Question 1:
The prepaid insurance balance reflects a 12-month insurance
policy which started on Sept. 1, 2018, and no adjustments were made
from Sept. 1 – Dec. 31, 2018. Write the adjusting journal entry for
Dec. 31, 2018. In Blank [1] enter the account to be debited. In
Blank [2] enter the amount to be debited. In Blank [3] enter the
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