How would I journalize this adjusting entry? The prepaid insurance balance is th

Question

How would I journalize this adjusting entry?

The prepaid insurance balance is the sum of three different policies. The first policy had a balance of $1,000 and it had 5 months of coverage remaining at the beginning of this monthly cycle. The second policy's balance of $2,400 represents the remaining portion of a three year policy of which one year had already elapsed at the beginning of this month. $1,100 is the balance of the third policy at the beginning of the month. $350 of the third policy's cost was used during the current period. (Note: Please use only one adjusting entry to adjust the Prepaid Insurance account)

Explanation / Answer

Adjusting entry to adjust the Prepaid Insurance account is shown as under:

Working shared below:

Date Particulars L.F Amount ($) Amount ($) 20XX Insurance 650    Prepaid Insurance 650 (For prepaid insurance expired during the month)

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