The adjusting entry on December 31 includes <u>a debit to Insurance</u> <u>Expense; a credit to </u><u>Prepaid Insurance</u>
This is further explained below.
<h3>What is fire insurance?</h3>
Generally, A valid contract even against loss or damage caused by an unintentional fire or other incidents that are normally covered under a fire policy is what is known as fire insurance.
The term "fire insurance" refers to a kind of homeowners insurance that compensates the policyholder for financial losses and damages brought on by the fire.
In conclusion, There is often some level of fire protection included in the majority of plans; however, homeowners may be able to obtain extra coverage in the event that their property is destroyed or damaged as a result of the fire.
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