On January 1 a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:
A.) Debit Insurance Expense, $460; credit Prepaid Insurance, $1,840.
B.) Debit Prepaid Insurance, $460; credit Insurance Expense, $460.
D.) Debit Insurance Expense, $460; credit Prepaid Insurance, $460.
E.) Debit Prepaid Insurance, $2,300; credit Cash, $2,300.
+4
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On January 1 a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. If the purchase was recorded ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.