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Purchased a 3 month insurance policy for cash (on all realpersonal property for $6,000. The...

Purchased a 3 month insurance policy for cash (on all real personal property for $6,000. The policy coverage period is December 1st,2018 through February 28,2019(a 3 month period) how would you make a general journal entry for this?

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Expert Solution

Journal entry at the time of payment

Date Title Debit Credit
Prepaid insurance $ 6,000
Cash $ 6,000

Adjusting entry on December 31

Date Title Debit Credit
Insurance expenses ($6,000/3) $ 2,000
Prepaid insurance $ 2,000

ekkarill92 answered 2 years ago
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