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4 January, 00:01

The prepaid insurance account had a beginning balance of $6,600 and was debited for $2,300 for premiums paid during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $4,100.

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  1. 4 January, 02:20
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    The adjusting entry is as follows

    Insurance expense A/c Dr $4,800

    To Prepaid insurance A/c $4,800

    (Being the insurance expense is recorded)

    The computation is shown below:

    = Beginning balance + debited amount - unexpired insurance amount

    = $6,600 + $2,300 - $4,100

    = $4,800

    So while preparing the adjusting entry, we debited the insurance expense account and credited the prepaid insurance account
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