A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was initially increased for the payment. The required adjusting journal entry on December 31 includes a: (Check all that apply.) A) credit to Prepaid insurance for $400. B) debit to Insurance expense for $400. C) credit to Insurance expense for $400. D) debit to Prepaid insurance for $400. E) debit to Insurance expense for $4,800.

Question

Mollie Frye

Business

20 September, 11:00

A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was initially increased for the payment. The required adjusting journal entry on December 31 includes a: (Check all that apply.) A) credit to Prepaid insurance for $400. B) debit to Insurance expense for $400. C) credit to Insurance expense for $400. D) debit to Prepaid insurance for $400. E) debit to Insurance expense for $4,800.

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Answers (1)

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Brenda Morse · Answer 1

The correct option is B

Explanation:

A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was initially increased for the payment. The required adjusting journal entry on December 31 that insurance expense would be debited for $400. Therefore, the correct option amongst the given options would be option B.