A few days ago
mmmhmmmm

Accounting Help!!! Adjusting Entries!!?

Adjusting entries for prepaid insurance

The prepaid insurance account had a balance of $3,600 at the beginning of the year. The account was debited for $4,800 for premiums on policies purchased during the year. Journalize the adjusting entry required at the end of the year for each of the following situations: (a) the amount of unexpired insurance during the year is $2,950;(b) the amount of expired insurance during the year is $5,450.

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A few days ago
fivestring46

Favorite Answer

3600. dr prepaid insurance beginning of year

4800. dr purchase of premiums during year

8400. balance in prepaid ins. before adj.

(a) unexpired ins. 2950.

so: 8400. – 2950. = 5450. used or exp.

dr insurance expense 5450.

cr prepaid insurance 5450.

(b) expired insurance during the year 5450.

so the expense is 5450. same as (a), just worded different.

so journal entry for (b) is the same as (a)

dr insurance expense 5450.

cr prepaid insurance 5450.

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