provide the answer for question 6 and 7 Use the following information for the next two questions:Entity A prepays one-year insurance for #240,000 on September 1,20x1.6. If Entity A uses the asset method of initial recording ofprepayments of expenses, the year-end adjustment wouldinclude aa. debit to prepaid insurance of P80,000.b. credit to prepaid insurance of P80,000.c. debit to insurance expense of #160,000.d. credit to insurance expense of P160,000.onndd co lem bes7. If Entity A uses the expense method of initial recording ofprepayments of expenses, the year-end adjustment would-include aair toa. debit to prepaid insurance of #80,000.b. credit to prepaid insurance of P160,000.debit to insurance expense of P80,000.d. credit to insurance expense of P160,000.С.

prepaid expenses are those expenses which are paid in advance before their occurrence to payment.…

Answered: Entity A prepays one-year insurance for…

Business

Accounting

Entity A prepays one-year insurance for 240,000 on September 1, 20x1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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provide the answer for question 6 and 7

Use the following information for the next two questions:
Entity A prepays one-year insurance for #240,000 on September 1,
20x1.
6. If Entity A uses the asset method of initial recording of
prepayments of expenses, the year-end adjustment would
include a
a. debit to prepaid insurance of P80,000.
b. credit to prepaid insurance of P80,000.
c. debit to insurance expense of #160,000.
d. credit to insurance expense of P160,000.
onndd co lem bes
7. If Entity A uses the expense method of initial recording of
prepayments of expenses, the year-end adjustment would
-include a
air to
a. debit to prepaid insurance of #80,000.
b. credit to prepaid insurance of P160,000.
debit to insurance expense of P80,000.
d. credit to insurance expense of P160,000.
С.

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