Financial Accounting Question:BluSky Manufacturing paid $40,000 for insurance.coverage from July 1, 2023 to June 30, 2024. Calculatethe unexpired insurance as of December 31, 2023.

Total Insurance Paid = $40,000Insurance Period = 12 months (July 1, 2023 - June 30, 2024)Monthly…

Answered: Question: BluSky Manufacturing paid…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 25P

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The premium on a three-year insurance policy expiring on December 31, 2022 was paid in total on January 1, 2020. The original payment was initially debited to a prepaid asset account. The appropriate adjusting entry had been recorded on December 31, 2020. The balance in prepaid asset account on December 31, 2020 should be a. The same as it would have been if the original payment had been debited initially to an expense account. b. Zero c. Higher that if the original payment had been debited initially to an expense account. d. The same as the original payment.
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Question: BluSky Manufacturing paid $40,000 for insurance. coverage from July 1, 2023 to June 30, 2024. Calculate the unexpired insurance as of December 31, 2023.