On January 1, 2010, Dimes and Quarters Corp. purchased a general liability insurance policy for $3,600 to provide coverage for the calendar year.
1. If the company recorded the policy as an asset when purchased, what is the monthly adjusting journal entry that should be recorded at January 31, 2010?
*2. If the company expensed the cost of the policy on January 1, 2010, what is the monthly adjusting entry that should be recorded at January 31, 2010?

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2010, Dimes and Quarters Corp. purchased a general liability insurance policy for $3,600 to provide coverage for the calendar year.
1. If the company recorded the policy as an asset when purchased, what is the monthly adjusting journal entry that should be recorded at January 31, 2010?
*2. If the company expensed the cost of the policy on January 1, 2010, what is the monthly adjusting entry that should be recorded at January 31, 2010?