A few days ago
franky lee

what is insurance expense in debit and prepaid insurance in credit?

A review of the ledger of Khan Company at December 31, 2006, produces the following data pertaining to the preparation of annual adjusting entries.

1. Prepaid Insurance $9,800. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2005, for $6,000. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2006, for $4,640. This policy has a term of 2 years.

Top 1 Answers
A few days ago
Anonymous

Favorite Answer

Insurance Exp: 3,000 (for the building insurance) + 2,320 (auto ins.) = 5,320

Ppd Ins Crd: 5320

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