At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400. During the year, $86,000 was paid for insurance. At the end of the year, after adjusting entries were recorded, the balance in the prepaid insurance account was $42,000. Insurance expense for the year would be:a. $86,000 b. $92,400. c. $134,400. d. $6,400.

Question

Business

Cortez Burnett

13 June, 00:19

At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400. During the year, $86,000 was paid for insurance. At the end of the year, after adjusting entries were recorded, the balance in the prepaid insurance account was $42,000. Insurance expense for the year would be:a. $86,000 b. $92,400. c. $134,400. d. $6,400.

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Answers (1)

Know the Answer?

Clarissa Lowery · Answer 1

correct option is b. $92,400

Explanation:

given data

prepaid insurance = $48,400

paid insurance = $86,000

prepaid insurance balance = $42,000

solution

we get here Insurance expense for year that is express as

Insurance expense = prepaid insurance + paid insurance - Prepaid insurance balance ... 1

put here value and we will get here Insurance expense

Insurance expense = $48,400 + $86,000 - $42,000

Insurance expense = $92,400

so here correct option is b. $92,400