Hi, Trying to solve this... but am missing something since my total adjusted tri

Question

Hi, Trying to solve this... but am missing something since my total adjusted trial balance won't balance... (missing 1500 somewhere in debit or have 1500 to much in credit)

Anyone has a clue? thanks!

The following information relates to year-end adjusting entries as of December 31, 2018 a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,200 b. Six months' worth of insurance has expired c. Four months' worth of rent has expired d. Of the $1,900 of office supplies purchased on July 4, $370 remains e. Interest expense on the $37,000 loan obtained from the city council on August 1 should be recorded f. Of the $2,900 of racing supplies purchased on December 12, $300 remains g. Suzie calculates that the company owes $14,700 in income taxes Assume the following ending balances for the month of July. Cash Prepaid insurance Supplies (Office) Equipment (Bikes) Accounts payable Deferred revenue Common stock Service revenue (Clinic) Advertising expense Legal fees expense Balance $ 11,330 6,000 1,900 13,500 1,900 5,600 23,000 4,700 970 1,500

Explanation / Answer

He purchased a Insurance at a Amount of $6,000 for one year with effect from 1st July 2018.

So at the end of the Year Prepaid Insurance will be $6,000*6/12= $3,000

Insurance expense for the year(From july to december) will be= $6,000*6/12= $3,000.

But as i can see in your trail balance, Prepaid Insurance is correct but insurance Expense is short by 1500 which is why the difference is causing.

Kindly correct the insurance expense to $3,000 to match the trail balance.

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