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7 May, 20:36

On December 31, 2017, Coolwear, Inc. had a balance in its prepaid insurance account of $48,400. During 2018, $86,000 was paid for insurance.

At the end of 2018, after adjusting entries were recorded, the balance in the prepaid insurance account was 42,000. Insurance expense for 2018 would be:

(A) $92,400.

(B) $6,400.

(C) $134,400.

(D) $86,000.

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Answers (1)
  1. 7 May, 23:50
    0
    Insurance expense will be $92400

    So option (a) will be correct option

    Explanation:

    We have given balance in prepaid insurance = $48400

    Insurance paid in 2018 = $86400

    Ending prepaid insurance balance = $42000

    We have to find the insurance expense for 2018

    Insurance expense for 2018 is given by

    Insurance expense = $48400+$86400-$42000 = $92400

    So option (a) will be the correct answer
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