Adjusting Entries for Prepaid Insurance
The balance in the prepaid insurance account, before adjustment at the end of the year, is $21,700. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:
A. The amount of insurance expired during the year is $16,450
Insurance Expense _____________
Prepaid Insurance _______________
B. The amount of unexpired insurance applicable to future periods is $5,250.
Insurance Expense ____________
Prepaid Insurance _____________