Question 3.3: Adjustment for Prepaid Expense The prepaid insurance account......

Financial Accounting [EXP-43430]

Adjustment for Prepaid Expense

The prepaid insurance account had a beginning balance of $ 6,400 and was debited for $ 3,600 of premiums paid during the year. Journalize the adjusting entry required at the end of the year assuming the amount of unexpired insurance related to future periods is $ 3,250.

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Insurance Expense ………………………………………………………………………… 6,750

Prepaid Insurance ………………………………………………………………………….. 6,750

Insurance expired ($ 6,400 + $ 3,600 − $ 3,250).

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