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7 May, 06:32

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $8,350 before adjustment, and the unexpired amount per analysis of policies is $3,550?

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  1. 7 May, 06:43
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    Insurance $4,800 (debit)

    prepaid insurance $4,800 (credit)

    Explanation:

    In order to find out adjusting entries. firstly, we need to calculate the difference between prepaid insurance account and Insurance account.

    That could be done by subtracting $3,550 from $8,350.

    Difference = 8350-3550 = 4800
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