Accounting. Adjusting entries. Could you explain how you get the answer?
Transaction B:
Policy A insurance expense = 14,400 x 3/24
= $1,800
Policy B insurance expense = 12,960 x 12/36
= $4,320
Policy C insurance expense = 2,400 x 5/12
= $1,000
Hence insurance expense of year 2019 = 1,800+4,320+1,000
= $7,120
Hence, the correct journal entry for insurance expense will be as under:
Journal
Date |
Account Titles and Explanation |
Debit |
Credit |
31st December 2019 |
Insurance expense |
$7,120 |
|
Prepaid insurance |
$7,120 |
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Accounting. Adjusting entries. Could you explain how you get the answer? Transaction B: Arnez Company's annual...
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