Answer:
1. Insurance expense A/c Dr $30,700
To Prepaid insurance A/c $30,700
(Being the insurance expense is adjusted)
2. Insurance expense A/c Dr $30,700
To Prepaid insurance A/c $30,700
(Being the insurance expense is expired)
Explanation:
The journal entries are shown below:
1. Insurance expense A/c Dr $30,700
To Prepaid insurance A/c $30,700
(Being the insurance expense is adjusted)
The computation is shown below:
= Balance in prepaid insurance account + premiums on policies purchased - unexpired insurance applicable
= $3,000 + $32,500 - $4,800
= $30,700
2. Insurance expense A/c Dr $30,700
To Prepaid insurance A/c $30,700
(Being the insurance expense is expired)
