Problem
Consider the following transactions for UpFront Corporation.
April 1 Paid cash for one-year policy, $18,000.
Dec 31 Unexpired/unused premiums on the insurance policy amounted to $4,500.
Task
a) Prepare journal entries to record the above transactions.
b) Prepare a T-account for Prepaid Insurance, post any entries that affect the account, and tally the ending balance for the account (assume Prepaid Insurance beginning balance of $9,000).