Question

The adjusting entry to account for use of prepaid insurance consists of: Multiple Choice a debit to Insurance Expense and a credit to Cash. a debit to Insurance Expense and a credit to Accumulated Depreciation. a debit to Insurance Expense and a credit to Prepaid Insurance. a debit to Prepaid Insurance and a credit to Accumulated Depreciation.

Answer 1

Answer:

a debit to Insurance Expense and a credit to Prepaid Insurance

Explanation:

The adjusting entry to record the prepaid insurance is shown below:

Insurance expense Dr XXXXX

           To Prepaid insurance  XXXXX

(Being the prepaid insurance account is adjusted)

For recording the adjusting entry, we debited the insurance expense and credited the prepaid insurance account so that the proper posting could be done