Linda's Flowers purchased a two-year insurance policy for $2,400. The adjusting journal entry for one month is

Name: Linda's Flowers purchased a two-year insurance policy for $2,400. The adjusting journal entry for one month is
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The total cost of the insurance policy is $2,400 for two years, which equals 24 months. Dividing $2,400 by 24 months gives $100 per month. The adjusting entry to record one month of insurance expense involves debiting Insurance Expense and crediting Prepaid Insurance for $100.

Linda's Flowers Purchased a Two-Year Insurance Policy for $2,400