e) A business purchased a two year insurance policy for $480 on September 1 of Y

Question

e) A business purchased a two year insurance policy for $480 on September 1 of Year 1 A. Record the journal entry for the purchase of the insurance B. Record the adjusting entry for insurance used for the year ended December 31 of Year C. Record the adjusting entry for insurance used for the year ended December 31 of Year 2 1 GENERAL JOURNAL DATE ledger after the adjusting entries have 170) The following is a partial list of the account balances that appear in a $5 000 3 600 been posted: Bank A/R A/P Sales $6 000 2 700 3 200 6 400 Rent Expense Salaries Expense 2 Capital Drawings 300 Using the information provided above, journalize the closing entries for this business GENERAL JOURNAL TE PARTCULARS

Explanation / Answer

169)

170)

Date Accounts title Dr Cr Year 1 Sept 1 Prepaid insurance 480 To cash 480 31 Dec Insurance expense 80 To prepaid insurance [480 / 24 months * 4 months] 80 Year2 31 Dec Insurance expense 240 To prepaid insurance [480 / 24 months * 12 months] 240

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