Samson and Sons purchased a 6-month insurance policy for $1,200 which covers the

Question

Samson and Sons purchased a 6-month insurance policy for $1,200 which covers the months July through December. Initially the entire cost of the insurance policy was recorded in prepaid insurance. What is the adjusting journal entry required at the end of July? Answer Debit prepaid insurance $1,200; Credit cash $1,200. Debit insurance expense $1,200; Credit prepaid insurance $1,200. Debit prepaid insurance $200; Credit insurance expense $200. Debit insurance expense $200; Credit prepaid insurance $200. Samson and Sons purchased a 6-month insurance policy for $1,200 which covers the months July through December. Initially the entire cost of the insurance policy was recorded in prepaid insurance. What is the adjusting journal entry required at the end of July? Debit prepaid insurance $1,200; Credit cash $1,200. Debit insurance expense $1,200; Credit prepaid insurance $1,200. Debit prepaid insurance $200; Credit insurance expense $200. Debit insurance expense $200; Credit prepaid insurance $200. Debit prepaid insurance $1,200; Credit cash $1,200. Debit insurance expense $1,200; Credit prepaid insurance $1,200. Debit prepaid insurance $200; Credit insurance expense $200. Debit insurance expense $200; Credit prepaid insurance $200.

Explanation / Answer

DR Insurance expense 200

CR Prepaid insurance 200

D

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