Question

The prepaid Insurance account had a beginning balance of $11,500 and was debited for $18,000 of premiums paid during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $13,000. If an amour box does not require an entry, leave it blank.

Answer 1

To journalize the adjusting entry required for the prepaid Insurance account at the end of the year, debit the Prepaid Insurance account and credit the Unexpired Insurance account for the amount of unexpired insurance related to future periods, which is $13,000.

Step-by-step explanation:

The adjusting entry required at the end of the year for the prepaid Insurance account can be journalized as follows:

Date Account Debit Credit

End of Year Prepaid Insurance 13,000 Unexpired Insurance

13,000 Premiums Collected

This entry takes into account the amount of unexpired insurance related to future periods, which is $13,000. The prepaid Insurance account is debited for $13,000, reducing its balance, and the Unexpired Insurance account is credited for $13,000, recognizing the portion of the prepaid insurance that has not yet been used.