Question

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QUESTION 1 2 points Save Answer On June 1, 2020. Palomo Corp paid $7,200 for a two-year insurance policy and correctly recorded the amount as Insurance Expense. The adjusting entry on December 31, 2020 is: debit Insurance Expense and credit Prepaid Insurance. $2.100. debit Prepaid Insurance and credit Insurance Expense. $2.100 debit Insurance Expense and credit Prepaid Insurance. $5.100. debit Prepaid Insurance and credit Insurance Expense. $5.100. QUESTION 2 2 points Save Answer Gibson Company has income before non-operating items of $1,428,000 and a tax rate of 30 percent. It also has the following items (gross amounts): Unusual gain S 92.000 Loss from discontinued operations 732.000 Dividend revenue 24,000 Income increasing prior period adjustment 296,000 What is the amount of income tax expense Gibson would report on its income statement? $463,200 OS243,600 $435,600 $332,400 QUESTION 3 2 points Save Answer The following information is available for Joe Novel Corporation: Cost of goods sold $ 120,000 Dividend revenue 5,000 Income tax eynense 12 000 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit

Answer 1

Question 1

Correct answer-----------------debit Prepaid insurance and credit Insurance Expense $5100

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The prepaid expense account should be debited for $5100 because out of 7200 only $2100 should be expensed as insurance expense and other 5100 is not yet expired.

As per accrual concept of accounting all expenses are recorded when they are incurred not when cash is paid for them.