The adjusting entry made to record prepaid insurance that has expired during the period would include a debit to:

Question

Quizplus · Accepted Answer

The adjusting entry made to record prepaid insurance that has expired during the period should debit to Insurance Expense and credit to Prepaid Insurance account. This is because the prepaid insurance was initially recorded as an asset, but as it is used up or expired, it becomes an expense for the period. Therefore, the adjustment is necessary to recognize the expense in the correct period. Option A (Unearned Insurance) and Option C (Accrued Insurance) are not correct because they do not represent the correct account affected by the adjustment.

The Adjusting Entry Made to Record Prepaid Insurance That Has