On July 1m 2017, Ling Co. pays $12,400 to Marsh Insurance Co., for a 2-year insurance contract. Both companies have fiscal years ending December 31.

For Ling Col journalize the entry on July 1 and adjusting entry on December 31,

Date Account Title and Explanation Debit Credit

Question

Business

Addisyn Sharp

22 October, 22:46

On July 1m 2017, Ling Co. pays $12,400 to Marsh Insurance Co., for a 2-year insurance contract. Both companies have fiscal years ending December 31.

For Ling Col journalize the entry on July 1 and adjusting entry on December 31,

Date Account Title and Explanation Debit Credit

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Answers (1)

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Lia Willis · Answer 1

Journal entries

Explanation:

The journal entries are as follows

On July 1

Prepaid insurance Dr $12,400

To Cash $12,400

(Being the payment is recorded)

On December 31

Insurance expense Dr $3,100

To Prepaid insurance $3,100

(Being the insurance expense is recorded)

It is computed below:

= $12,400 * 6 months : 24 months

= $3,100

On July 1m 2017, Ling Co. pays $12,400 to Marsh Insurance Co., for a 2-year insurance contract. Both companies have fiscal years ending December 31.For Ling Col journalize the entry on July 1 and adjusting entry on December 31,Date Account Title and Explanation Debit Credit

On July 1m 2017, Ling Co. pays $12,400 to Marsh Insurance Co., for a 2-year insurance contract. Both companies have fiscal years ending December 31.

For Ling Col journalize the entry on July 1 and adjusting entry on December 31,

Date Account Title and Explanation Debit Credit