The prepaid insurance account had a beginning balance of $4,500 and was debited for $16,600 of 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 $5,600. Refer to the Chart of Accounts for exact wording of account titles.

Question

Mariah Chambers

Business

15 September, 03:20

The prepaid insurance account had a beginning balance of $4,500 and was debited for $16,600 of 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 $5,600. Refer to the Chart of Accounts for exact wording of account titles.

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Craig Zamora · Answer 1

prepaid expense 15,500 debit

prepaid insurance 15,500 credit

Explanation:

The amount of unexpired insurance will be the ending balance of the account

4,500 debit

+ 16,600 premium paid

+ / - adjustment

5,600 ending

4,500 + 16,600 - 5,600 = 15,500