Homework Answers
Your required answer is option A i.e. Debit to insurance expense $3,000.
Explanation:
Since insurance expense paid on June 1 therefore on that date following journal entry has been passed:
Prepaid Insurance Dr. $6000
Cash Cr. $6000
And on December 31 following adjustment entry would be pass to record Insurance Expense:
Insurance Expense Dr. $3000
Prepaid Insurance Cr. $3000
(Insurance Expense Booked for 6 Months starting from July to december)
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