On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $420. The correct...

On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $420. The correct adjusting entry on December 31, 2019, is:

Multiple Choice

debit Insurance Expense $140; credit Prepaid Insurance $140
debit Insurance Expense $315; credit Prepaid Insurance $315
debit Prepaid Insurance $35; credit Insurance Expense $35
debit Prepaid Insurance $420; credit Insurance Expense $420

Expert Solution

Problem in answer then comment below. I will help you.

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Here option 1st is correct ...

Here insurance date is sept 2019 .. so for dec 2019 ...

4 month pass.. that means amount shown is (420/3) = 140 ..

So entries are

Dept insurance expense 140 , credit prepaid insurance 140 ...

Colby Messinger answered 2 years ago

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