Albinson Company paid $96,000 for a two-year insurance policy on October 1 and recorded the $96,000...

Albinson Company paid $96,000 for a two-year insurance policy on October 1 and recorded the $96,000 as a debit to Prepaid Insurance and a credit to Cash. What adjusting entry should Albinson make on December 31, the end of the accounting period (no previous adjustment has been made)?

Select one: A. Insurance Expense 12,000 Prepaid Insurance 12,000

B. Insurance Expense 48,000 Prepaid Insurance 48,000

C. Prepaid Insurance 12,000 Insurance Expense 12,000

D. Prepaid Insurance 84,000 Insurance Expense 84,000

Expert Solution

ekkarill92 answered 2 years ago

Oriole Company paid $25800 on June 1, 2017 for a two-year insurance policy and recorded the...

Oriole Company paid $25800 on June 1, 2017 for a two-year insurance policy and recorded the entire amount as Insurance Expense. The December 31, 2017 adjusting entry

On October 1 of Year 1 Lesikar Company paid $1,200 cash for an insurance policy that...

On October 1 of Year 1 Lesikar Company paid $1,200 cash for an insurance policy that would provide protection for a one year term. Which of the following shows how the required adjustment on December 31, Year 1 will affect Lesikar’s ledger accounts? Assets = Liabilities + Stockholders’ Equity Cash + Prepaid Insurance = Accounts Payable + Common Stock + Retained Earnings (1,200) 1,200 Assets = Liabilities + Stockholders’ Equity Cash + Prepaid Insurance = Accounts Payable + Common Stock...

The Fireworks Hut paid $18,200 for a one-year insurance policy on January 1 and recorded the...

The Fireworks Hut paid $18,200 for a one-year insurance policy on January 1 and recorded the entire amount as prepaid insurance. Before preparing its March 31 financial statements the company should make which of the following adjusting entries? Select one: a. debit Prepaid Insurance, $13,650; credit Insurance Expense, $13,650. b. debit Cash, $9,100; credit Prepaid Insurance, $9,100. c. debit Cash, $18,200; credit Insurance Expense, $18,200. d. debit Insurance Expense, $4,550 credit Prepaid Insurance $4,550.

A. Paid $6,400 cash in advance on October 1 for a one-year insurance policy. B. Received...

A. Paid $6,400 cash in advance on October 1 for a one-year insurance policy. B. Received an $5,200 cash advance for a contract to provide services in the future. The contract required a one-year commitment, starting April 1. C. Purchased $2,000 of supplies on account. At year’s end, $255 of supplies remained on hand. D. Paid $11,520 cash in advance on August 1 for a one-year lease on office space. The Accounting Equation Event/ Adjustment Total Assets = Liabilities +...

On March 1, 2009, the premium on a two-year insurance policy on equipment was paid amounting...

On March 1, 2009, the premium on a two-year insurance policy on equipment was paid amounting to $1,800. How would the financial position as of December 31, 2009 (the end of the accounting period) be affected if the accountant did not record the adjusting entry? Select one: a. No accounts will be affected. b. Assets overstated by $750; Liabilities unaffected; Owners' equity overstated by $750. c. Assets understated by $750; Liabilities unaffected; Owners' equity understated by $750. d. Assets understated...

On June 1, Year 1, Company X paid $7,200 for a three-year insurance policy that became...

On June 1, Year 1, Company X paid $7,200 for a three-year insurance policy that became effective on that same date. $_________ Year 1 Insurance Expense $_________ Insurance Payable at Dec. 31, Year 1 [If none, so state.] $_________ Prepaid Insurance at Dec. 31, Year 1 [If none, so state] On April 1, Year 2, Paul added an additional policy when the firm paid $2,400 for a two-year policy that became effective on that same day. $_________ Year 2 Insurance...

On July 1, a company paid the $1,200 premium on a one-year insurance policy with benefits...

On July 1, a company paid the $1,200 premium on a one-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the first year ended December 31? Multiple Choice $500. $600. $300. $1,200. $900.

On April 1, a company paid the $1,800 premium on a three-year insurance policy with benefits...

On April 1, a company paid the $1,800 premium on a three-year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the year ended December 31? a. $1,350.00. b. $450.00. c. $600.00. d. $1,800.00. e. $50.00.

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits...

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. What will the balance be in the Prepaid Insurance account on the Balance Sheet for the current year ended December 31? Select one: A. $1,000. B. $2,400. C. $1,400. D. $400. E. $1,200.

A company paid the $1,350 premium on a three-year insurance policy on April 1, 2020. The...

A company paid the $1,350 premium on a three-year insurance policy on April 1, 2020. The policy gave protection beginning on that date. How many dollars of the premium will appear as an expense on the calendar year 2020 income statement assuming the accrual basis of accounting? Assuming the cash basis of accounting?

Question