Question

At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400. During the year, $86,000 was paid for insurance. At the end of the year, after adjusting entries were recorded, the balance in the prepaid insurance account was $42,000. Insurance expense for the year would be:a. $86,000 b. $92,400. c. $134,400. d. $6,400.

Answer 1

correct option is b. $92,400

Step-by-step explanation:

given data

prepaid insurance = $48,400

paid insurance = $86,000

prepaid insurance balance = $42,000

solution

we get here Insurance expense for year that is express as

Insurance expense = prepaid insurance + paid insurance - Prepaid insurance balance .......................1

put here value and we will get here Insurance expense

Insurance expense = $48,400 + $86,000 - $42,000

Insurance expense = $92,400

so here correct option is b. $92,400