Question

Paid $3,600 for a three-year insurance policy on December 6. Give the original entry for the purchase of the insurance policy.?

Answer 1

The original entry for the purchase of the insurance policy is to debit the Insurance Expense account for $3,600 and credit the Cash account for $3,600.

Step-by-step explanation:

The original entry for the purchase of the insurance policy would be as follows:

1. Debit Insurance Expense account for $3,600
2. Credit Cash account for $3,600

This entry records the payment made for the three-year insurance policy. The Insurance Expense account is debited to reflect the expense incurred, and the Cash account is credited to show the decrease in cash as a result of the payment.