https//act pearsoncmg.com/activity/5/4/1 Dec 31 Bal. 6500 1100 Bal A two year in

Question

https//act pearsoncmg.com/activity/5/4/1 Dec 31 Bal. 6500 1100 Bal A two year insurance policy for $10,560 was purchased on November 1 of the current year. Record the transaction for the year ended December 31. Adjustment Type: Deferrals/Prepaids Insurance Expense Prepaid Insurance Dec. 31 Nov. 1 10560 Dec. 31 Bal Bal Completed services that were paid for six months earlier, $760. The Service Revenue unadjusted balance as of December 31 is $8,500. The Unearned Revenue balance as of December 31 is $8,100.

Explanation / Answer

1-Nov Prepaid Insurance Dr 10560                    Cash Cr 10560 31-Dec Insurance expense Dr 880             Prepaid Insurance Cr 880 ( 10560/24*2)                 Insurance Expense 31-Dec To prepaid Inurance 880 31-Dec By balance c/d 880                 Prepaid Insurance 1-Nov To Cash 10560 31-Dec By Insurance expense 880 31-Dec By balance c/d 9680 10560 10560

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