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At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $6,960 and...

At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $6,960 and Insurance Expense of $0. The insurance was purchased on July 1 and provides coverage for 24 months. Required: Prepare the adjusting journal entry on December 31. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance.

Solutions

Expert Solution

Adjusting entry

date account and explanation Debit Credit
Insurance expense (6960/24*6) 1740
Prepaid insurance 1740
(To record insurance expense)

T account

Prepaid insurance Insurance expense
Beg bal 6960 12/31 1740 Beg bal 0              
12/31 1740
End Bal 5220 End Bal 1740

ekkarill92 answered 2 years ago
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