Question

On January 1, a company purchased a five-year insurance policy for $3,600 with coverage starting immediately. If the purchase
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer -

Explanation
The adjusting entry at the end of the first year is:-

Debit Insurance Expense, $720; credit Prepaid Insurance, $720.

$3600 / 5 years = $720.

Hence, Option - (D) is Correct.

Add a comment
Know the answer?
Add Answer to:
On January 1, a company purchased a five-year insurance policy for $3,600 with coverage starting immediately....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • On January 1 a company purchased a five-year insurance policy for $2,300 with coverage starting immediately....

    On January 1 a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: A.)Debit Insurance Expense, $460; credit Prepaid Insurance, $1,840. B.)Debit Prepaid Insurance, $460; credit Insurance Expense, $460. C.)Debit Prepaid Insurance, $1,840; credit Insurance Expense, $1,840. D.)Debit Insurance Expense, $460; credit Prepaid Insurance, $460. E.)Debit Prepaid Insurance,...

  • 16) On January 1, a business purchased a five-year insurance policy for $2,500 with coverage starting...

    16) On January 1, a business purchased a five-year insurance policy for $2,500 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end. Draw the T-account for Prepaid Insurance to show the this adjustment. 17) Grayson Inc. leased a portion of its store to another company for 10 months beginning on July 1, at a monthly rate of $700. Grayson collected the entire $7,000 cash on July 1...

  • On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $720. The correct...

    On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $720. The correct adjusting entry on December 31, 2019, is: Multiple Choice debit Insurance Expense $240; credit Prepaid Insurance $240 debit Insurance Expense $540; credit Prepaid Insurance $540 debit Prepaid Insurance $60; credit Insurance Expense $60 debit Prepaid Insurance $720; credit Insurance Expense $720

  • On January 1, Fey Properties paid $12,600 for a three-year insurance premium, with coverage beginning immediately....

    On January 1, Fey Properties paid $12,600 for a three-year insurance premium, with coverage beginning immediately. Fey Company prepares monthly financial statements. Which of the following describes the required adjusting entry on January 31? Debit Cash for $4,200 and Credit Prepaid insurance for $4,200 Debit Prepaid insurance for $350 and Credit Insurance expense for $350 Debit Insurance expense for $350 and Credit Prepaid insurance for $350 Debit Cash for $8,400 and Credit Prepaid insurance for $8,400 Debit Insurance expense for...

  • Miro Inc. purchased a 1 year insurance policy for $4.320 on November 1.2015 with coverage starting...

    Miro Inc. purchased a 1 year insurance policy for $4.320 on November 1.2015 with coverage starting on that date. A) What entry is made on 11/1/15? Dr Prepaid Insurance Cr Cash 4320 4320 B) What adjusting entry is to be made on 12/31/152 720 repaid Insurance C) What is the balance in the prepaid insurance after the adjusting entry is made? 3600 4 of5 Attempts Used

  • On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $1,440. The correct...

    On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $1,440. The correct adjusting entry on December 31, 2019, is: Multiple Choice debit Insurance Expense $480; credit Prepaid Insurance $480 debit Insurance Expense $1,080; credit Prepaid Insurance $1,080 debit Prepaid Insurance $120; credit Insurance Expense $120 debit Prepaid Insurance $1,440; credit Insurance Expense $1,440

  • Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2021, and...

    Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2021, and charged the $3,000 premium to Insurance expense. At its December 31, 2021, year-end, Yummy Foods Multiple Choice Prepaid insurance 2,375 Insurance expense 2,375 Prepaid insurance 625 Insurance expense 625 Insurance expense 625 Prepaid insurance 625 Insurance expense 625 Prepaid insurance 2,375 Insurance payable 3,000 would record which of the following adjusting entries?

  • VULELE Tate Company paid $12,000 for a one-year insurance policy on February 1, 2019 and the...

    VULELE Tate Company paid $12,000 for a one-year insurance policy on February 1, 2019 and the insurance coverage began on February 1. Assuming the company made the most appropriate journal entry to record the insurance on February 1 and that no other adjusting entries have been made, the December 31, 2020 adjusting entry is debit Insurance Expense and credit Prepaid Insurance Expense for $11,000. debit Prepaid Insurance Expense and credit Insurance Expense for $11,000. debit Prepaid Insurance Expense and credit...

  • Is the answer I marked, correct? Tummy Foods purchased a two-year fire and extended coverage insurance...

    Is the answer I marked, correct? Tummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2021, and charged the $4,200 premium to Prepaid insurance. At its December 31, 2021, year-end, Tummy Foods would record which of the following adjusting entries? Multiple Choice 8751 Prepaid insurance Insurance expense 875 Insurance expense Prepaid insurance Insurance payable 875| 3,325 4,200 o Prepaid insurance Insurance expense preposid insurancese 3,325 3,325

  • On August 1, 2019, a firm purchased a 1-year insurance policy for $6,900 and paid the...

    On August 1, 2019, a firm purchased a 1-year insurance policy for $6,900 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2019, is Multiple Choice $2,300 $4,025 $6,900 $2,875 On April 1, 2019, a firm accepted a 6-month, 10 percent note for $2,400 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended June 30, 2019, is Multiple Choice $60...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT