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nikklg [1K]
3 years ago
14

Harrod Company paid $4,800 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The b

alance in the prepaid insurance account before adjustment at the end of the year is $4,800 and no adjustments had been made previously. The adjusting entry required on December 31 is:
Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400.

Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.

Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200.

Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200.

Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.
Business
1 answer:
Cerrena [4.2K]3 years ago
6 0

Answer:

Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.

Explanation:

The journal entry is given below

Insurance expense A/c Dr $2,400

        To Prepaid Insurance $2,400

(Being insurance expense is recorded)

The computation is shown below:

= Insurance premium ÷ number of months × required months

= $4,800 ÷ 4 months × 2 months

= $2,400 months

The 2 months is taken from November 1 to December 31

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I really hope this answer helps you out! It makes my day helping people like you and giving back to the community that has helped me through school! If you could do me a favor, if this helped you and this is the very best answer and you understand that all of my answers are legit and top notch. Please mark as brainliest! Thanks and have a awesome day!

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Read 2 more answers
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