The unadjusted trial balance for Prepaid Insurance shows a $1,850 balance. $600 of the balance was unexpired at year's end. On the adjusted trial balance, the balance for Prepaid Insurance is a:
A)$600 debit.
B)$600 credit.
C)$1,250 debit.
D)$1,250 credit.

Question

Quizplus · Accepted Answer

The correct balance for Prepaid Insurance on the adjusted trial balance is a $600 debit, reflecting the unexpired portion of the insurance. The adjustment involves reducing the Prepaid Insurance account by $1,250 ($1,850 - $600), leaving the $600 as the adjusted balance.

The Unadjusted Trial Balance for Prepaid Insurance Shows a $1,850