Answer:
For Marigold
The journal entries on July 1 , 2020 are:
Dr Insurance prepayment $13,200
Cr Cash $13,200
being insurance paid for in advance
The adjusting entry at the close of the year
Dr Insurance expense $2,200
Cr Insurance prepayment $2,200
Being insurance expense incurred in the year
The other party is Kalter insurance not Dobbs Co:
he journal entries on July 1 , 2020 are:
Dr Cash $13,200
Cr Prepaid revenue $13,200
being revenue received in advance
The adjusting entry at the close of the year
Dr Prepaid revenue $2,200
Cr Revenue $2,200
Being recognition earned in the year
Explanation:
Upon the payment of the insurance , the cash account of the paying company is credited and that of the receiving company debited .
The other entry in the paying company is insurance prepayment while that of the receiving company is prepaid revenue .
