Reviewing insurance policies revealed that a single policy was purchased on August 1, for one year’s coverage, in the amount of $6,000. There was no previous balance in the Prepaid Insurance account at that time. Based on the information provided: A. Make the December 31 adjusting journal entry to bring the balances to correct. If an amount box does not require an entry, leave it blank. B. Show the impact that these transactions had. If an amount box does not require an entry, leave it blank.
Reviewing insurance policies revealed that a single policy was purchased on August 1, for one year’s coverage, in the amount of $6,000. There was no previous balance in the Prepaid Insurance account at that time. Based on the information provided: A. Make the December 31 adjusting journal entry to bring the balances to correct. If an amount box does not require an entry, leave it blank. B. Show the impact that these transactions had. If an amount box does not require an entry, leave it blank.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Reviewing insurance policies revealed that a single policy was purchased on August 1, for one year’s coverage, in the amount of $6,000. There was no previous balance in the Prepaid Insurance account at that time. Based on the information provided:
A. Make the December 31
B. Show the impact that these transactions had. If an amount box does not require an entry, leave it blank.
Transcribed Image Text:Reviewing insurance policies revealed that a single policy was purchased on August 1, for one year's coverage, in the amount of $6,000. There was no
previous balance in the Prepaid Insurance account at that time. Based on the information provided:
A. Make the December 31 adjusting journal entry to bring the balances to correct. If an amount box does not require an entry, leave it blank.
Dec. 31
B. Show the impact that these transactions had. If an amount box does not require an entry, leave it blank.
Prepaid Insurance
Beginning Balance
Premium paid
Subtotal
Expired
Prepaid/Unexpired
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