The balance in the Prepaid Insurance account on the unadjusted trial balance (before adjustment) is $8,400. This balance is the result of a prepayment of insurance made on December 1, 20X1 for coverage from December 1, 20X1 through May 31, 20X2. The adjusting entry required at year-end on December 31 is Group of answer choices A. Debit Insurance Expense $7,000; credit Prepaid Insurance $7,000. B. Debit Prepaid Insurance $8,400; credit Cash $8,400. C. Debit Insurance Expense $1,400; Credit Prepaid Insurance, $1,400. D. Debit Insurance Expense $1,400; credit Cash $1,400.
The balance in the Prepaid Insurance account on the unadjusted trial balance (before adjustment) is $8,400. This balance is the result of a prepayment of insurance made on December 1, 20X1 for coverage from December 1, 20X1 through May 31, 20X2. The adjusting entry required at year-end on December 31 is Group of answer choices A. Debit Insurance Expense $7,000; credit Prepaid Insurance $7,000. B. Debit Prepaid Insurance $8,400; credit Cash $8,400. C. Debit Insurance Expense $1,400; Credit Prepaid Insurance, $1,400. D. Debit Insurance Expense $1,400; credit Cash $1,400.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The balance in the Prepaid Insurance account on the unadjusted trial balance (before adjustment) is $8,400. This balance is the result of a prepayment of insurance made on December 1, 20X1 for coverage from December 1, 20X1 through May 31, 20X2. The adjusting entry required at year-end on December 31 is
Group of answer choices
A. Debit Insurance Expense $7,000; credit Prepaid Insurance $7,000.
B. Debit Prepaid Insurance $8,400; credit Cash $8,400.
C. Debit Insurance Expense $1,400; Credit Prepaid Insurance, $1,400.
D. Debit Insurance Expense $1,400; credit Cash $1,400.
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