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At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $9,120 and...

At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $9,120 and Insurance Expense of $0. The insurance was purchased on July 1 and provides coverage for 24 months.

How would you prepare the adjusting journal entry on December 31?

How would you prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance?

Solutions

Expert Solution

Requirement- 1;

Date

Accounts Title & Explanation

Debit

Credit

Dec. 31

Insurance Expense

$2,280

       Prepaid Insurance

$2,280

(Adjusting entry for recording expired insurance)

Requirement- 2;

Prepaid Insurance

Unadjusted Bal.

$9,120

Adjusting entry

$2,280

Adjusted Bal.

$6,840

Insurance Expense

Unadjusted Bal.

$0

Adjusting entry

$2,280

Adjusted Bal.

$2,280

jeff jeffy answered 3 years ago
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