On January 1, a company purchased a five-year insurance policy for $2200 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:
A. Debit Insurance Expense, $440; credit Prepaid Insurance, $1760.
B. Debit Prepaid Insurance, $2200; credit Cash, $2200.
C. Debit Insurance Expense, $440; credit Prepaid Insurance, $440.
D. Debit Prepaid Insurance, $440; credit Insurance Expense, $440.
E. Debit Prepaid Insurance, $1760; credit Insurance Expense, $1760.
Answer: C
You might also like to view...
The majority of the money spent at mass-merchandisers and supermarkets results from unplanned, impulse purchases
Indicate whether the statement is true or false
The budget is more directed towards planning than are the income statement and balance sheet
Indicate whether the statement is true or false.
A formal ____________________ is a document that analyzes findings, draws conclusions, and makes recommendations intended to solve a problem
Fill in the blank(s) with correct word
A guardian angel is someone in a position who can look out for you and your career interests. _________________________
Answer the following statement true (T) or false (F)