As of December 31, Plush has not recorded any insurance expense for the year. The only...

As of December 31, Plush has not recorded any insurance expense for the year. The only insurance policy it owns is the one purchased on July 10, a three year insurance policy for $72,000 starting on August 1st. Make a general journal entry.

Solutions

Expert Solution

The journal entry is

Date account title debit credit

31 dec. Insurance expense $10000

Prepaid insurance $10000

( to record insurance expense

for 5 months)

Calculation

Insurance expense =( 72000 / life of policy)× period expired during current calendar year

= (72000/36)×5

= $ 10000

ekkarill92 answered 1 year ago

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