Insurance Premium Expired Adjusting Entry
You will get a.
Insurance premium expired adjusting entry. The adjusting entry to record expired insurance would be to debit a. Prepaid insurance cash and 26. Over time the asset account shrinks and the insurance expense account increases.
Prepaid insurance is insurance paid in advance and that has not yet expired on the date of the balance sheet balance sheet the balance sheet is one of the three fundamental financial statements. In the entry above we are actually transferring 4 000 from the asset to the expense account i e from prepaid insurance to insurance expense. This is accomplished with a debit of 1 000 to insurance expense and a credit of 1 000 to prepaid insurance.
On december 31 2016 the expired portion of prepaid insurance 1 800 3 12 450 will be converted into expense by making the following adjusting entry. Of the total six month insurance amounting to 6 000 1 000 per month the insurance for 4 months has already expired. The adjusting entry to record accrued salaries would be debit credit a.
If blue sky uses expense method the whole amount of 1 800 will be recorded as expense by making the following journal entry on october 1 2016. 1 6 of 2 400 and will credit prepaid insurance for 400. On december 31 the company writes an adjusting entry to record the insurance expense that was used up expired and to reduce the amount that remains prepaid.
Workers compensation insurance premium are usually paid in advance based on their estimated payroll during the period. Insurance expense prepaid insurance b. Initial journal entry for prepaid rent.
Entry 2 3. The total premium for each policy was paid in full for all months at the purchase date and the prepaid insurance account was debited for the full cost. You will find someone to finance your insurance.
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