Two Company purchased a one-year insurance policy on July 1, 2018 for $2,400. The company debited...

Two Company purchased a one-year insurance policy on July 1, 2018 for $2,400. The company debited the entire amount to insurance expense. The adjusting entry on December 31, 2018 would include

A credit to prepaid insurance for $2,400

A debit to insurance expense for $1,200

No entry

A credit to insurance expense for $1,200

Expert Solution

Answer is.....a credit to insurance expense for $1,200

This is because the company had debited $2,400 to interest expense but actual expenses of that year is of 6 months from July 1, 2018 to December 31, 2018.

So the adjusting entry will be a debit to prepaid insurance for 1,200 and credit to insurance expense for 1,200.

(2,400 x 6/12 = 1,200)

ekkarill92 answered 2 years ago

The company purchased a one-year insurance policy on November 1, 2010 at a cost of $2,400. No...

The company purchased a one-year insurance policy on November 1, 2010 at a cost of $2,400. No adjusting entries for the year had yet been made. Debit : insurance expense $400 credit : prepaid insurance $400 Why is it become $400?

On July 31, 2018, a company purchased a two-year insurance policy for $27,000, paying cash and...

On July 31, 2018, a company purchased a two-year insurance policy for $27,000, paying cash and debiting Prepaid Insurance for the entire two-year premium amount. The adjusting entry on December 31, 2018 includes a: credit to Prepaid Insurance $5,625. credit to Insurance Expense $5,625. debit to Prepaid Insurance $6,750. debit to Insurance expense $6,750.

A one-year insurance policy was purchased on June 1 for$2,400. The adjusting entry on December 31...

A one-year insurance policy was purchased on June 1 for $2,400. The adjusting entry on December 31 would be (assume no adjustments have been made for insurance at all during the current year): Date Account Titles Debits Credits

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits...

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. What will the balance be in the Prepaid Insurance account on the Balance Sheet for the current year ended December 31? Select one: A. $1,000. B. $2,400. C. $1,400. D. $400. E. $1,200.

On September 1, 2009, Olpe Corporation paid $2,400 in advance for a one year insurance policy...

On September 1, 2009, Olpe Corporation paid $2,400 in advance for a one year insurance policy that covers the period September 1, 2009 through August 31, 2010. What amount of insurance expense should Olpe report for the year endedDecember 31, 2009? A)$800 B)$1,200 C)$2,400 D)$0

On July 1, a company paid the $1,200 premium on a one-year insurance policy with benefits...

On July 1, a company paid the $1,200 premium on a one-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the first year ended December 31? Multiple Choice $500. $600. $300. $1,200. $900.

Prepaid $3600 cash for a one-year insurance policy. The account that gets debited is______ . The...

Prepaid $3600 cash for a one-year insurance policy. The account that gets debited is______ . The account that gets credited is_______. Prepaid Insurance Cash Insurance Expense Accounts Payable

On July 1, East Lake, Inc. purchased a 2-year insurance policy for $12,600. Prepaid Insurance was...

On July 1, East Lake, Inc. purchased a 2-year insurance policy for $12,600. Prepaid Insurance was debited for the entire amount. On December 31, when the annual financial statements are prepared, the appropriate adjusting journal entry to be made would be to a) debit Prepaid Insurance $2,100; credit Insurance Expense $2,100. b) debit Insurance Expense $9,450; Credit Prepaid Insurance $9,450. c) debit Prepaid Insurance $12,600; credit Insurance Expense $12,600. d) debit Insurance Expense $3,150; credit Prepaid Insurance $3,150.

Smokey Company purchases a one-year insurance policy on July 1 for $4,380. The adjusting entry on...

Smokey Company purchases a one-year insurance policy on July 1 for $4,380. The adjusting entry on December 31 is a.debit Insurance Expense, $2,190; credit Prepaid Insurance, $2,190 b.debit Insurance Expense, $1,825; credit Prepaid Insurance, $1,825 c.debit Insurance Expense, $2,555; credit Prepaid Insurance, $2,555 d.debit Prepaid Insurance, $2,190; credit Cash, $2,190

Smokey Company purchases a one-year insurance policy on July 1 for $3,792. The adjusting entry on...

Smokey Company purchases a one-year insurance policy on July 1 for $3,792. The adjusting entry on December 31 is a.debit Insurance Expense, $2,212; credit Prepaid Insurance, $2,212 b.debit Insurance Expense, $1,580; credit Prepaid Insurance, $1,580 c.debit Insurance Expense, $1,896; credit Prepaid Insurance, $1,896 d.debit Prepaid Insurance, $1,896; credit Cash, $1,896

Question