Which of the following is the proper adjusting entry, based on a prepaid insurance account balance...

Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $17,192 and unexpired insurance of $2,150, for the fiscal year ending on April 30?

a.debit Insurance Expense, $17,192; credit Prepaid Insurance, $17,192

b.debit Insurance Expense, $15,042; credit Prepaid Insurance, $15,042

c.debit Insurance Expense, $2,150; credit Prepaid Insurance, $2,150

d.debit Prepaid Insurance, $15,042; credit Insurance Expense, $15,042

Expert Solution

Insurance Expense that has to be expensed during the current year is $17,192 - $2,150

= $15,042

Journal entry will be

Debit Insurance Expense account $15,042

Credit Prepaid Insurance account $15,042

Option 'B' is correct.

ekkarill92 answered 2 years ago

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