At December 31 2016 before any year-end adjustments Obama Company's Insurance Expense account had a balance of $2600 and its Prepaid Insurance account had a balance of $7600. It was determined that $3200 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be

Question

Quizplus · Accepted Answer

The initial Insurance Expense is $2600. Since $3200 of the Prepaid Insurance has expired, this amount should be added to the Insurance Expense. Therefore, the adjusted Insurance Expense is $2600 + $3200 = $5800.

At December 31 2016 Before Any Year-End Adjustments Obama Company's