Adjusting entry at the end of the first year, Accounting Basics

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Adjusting entry at the end of the first year

On January 1 a company purchased a five- year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:

A. Debit Prepaid Insurance, $1,800; credit Cash, $1,800.

B. Debit Prepaid Insurance, $1,440; credit Insurance Expense, $ 1,400.

C. Debit Prepaid Insurance, $360; credit Insurance Expense, $360.

D. Debit Insurance Expense, $360; credit Prepaid Insurance, $360.

E. Debit Insurance Expense, $360; credit prepaid Insurance, $1,440.

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Accounting Basics: Adjusting entry at the end of the first year

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Accounting Basics: Adjusting entry at the end of the first year

Reference No:- TGS070420

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

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Ask an Expert for Answer!!

Accounting Basics: Adjusting entry at the end of the first year

Reference No:- TGS070420

Recent Questions Asked Accounting Basics

Q : What is the effect of the sale

Q : What was the amount of net income for the year

Q : Debate the benefits of stem-cell research versus religious

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