On April 1, 2016, the premium on a one-year insurance policy was purchased for $2,400 cash...
On April 1, 2016, the premium on a one-year insurance policy was
purchased for $2,400 cash with the insurance coverage beginning on
that date. The books are adjusted only at year-end. Which of the
following correctly describes the effect on the financial
statements of the December 31, 2016 adjusting entry?
Homework Answers
Adjusting entry
| Date | account and explanation | debit | credit |
| Dec 31 | Insurance expense (2400*9/12) | 1800 | |
| Prepaid insurance | 1800 | ||
| (To record insurance) |
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On April 1, 2016, the premium on a one-year insurance policy was
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