Early in 2018, Benton Well Supplies discovered that a five-year insurance premium payment of $50,000 at...

Early in 2018, Benton Well Supplies discovered that a five-year insurance premium payment of $50,000 at the beginning of 2015 was debited to insurance expense. The correcting entry would include:

a. A credit to retained earnings of $20,000.

b. A debit to insurance expense of $20,000.

c. A debit to prepaid insurance of $30,000.

d. A debit to prepaid insurance of $50,000.

Expert Solution

Insurance expenses for remaining 2 years will be credited to retained earnings and debited to Preapid insurance.
A credit to retained earnings of $20,000 is the correct option

ekkarill92 answered 2 years ago

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