On January 1, 2014 the balance in the prepaid insurance account was $2,500. On December 31, 2014, after the 2014 adjusting entries were made, the balance of the prepaid insurance account was $1,200. During 2014, cash payments for insurance premiums amounted to $5,000, which was debited to the prepaid insurance account. Prepare the adjusting entry, which must have been made at December 31, 2014.

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2014 the balance in the prepaid insurance account was $2,500. On December 31, 2014, after the 2014 adjusting entries were made, the balance of the prepaid insurance account was $1,200. During 2014, cash payments for insurance premiums amounted to $5,000, which was debited to the prepaid insurance account. Prepare the adjusting entry, which must have been made at December 31, 2014.

On January 1, 2014 the Balance in the Prepaid Insurance