Adjusting Entry for Insurance

wulfpakgrl · #1 Nov 17, 2007, 01:48 PM

What is the adjusting entry? Problem: The insurance premium outstanding on Jan 1, 2007 covers the period Jan 1 through Aug 31, 2007. The insurance premium of $8460 recorded in August covers the period Sept 1, 2007 to Aug 31, 2008. The company estimates that 80% of the premiums are attributable to general activities and 20% to selling activities.

Totals from Unadjusted Trial Balance 12/31/07:

Prepaid Insurance Debit Balance of 11020
Insurance Expense - Selling Zero Balance
Insurance Expense - General Zero Balance



At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to: Get free answers from experts in any of our 300+ topics. Accept money for answers that you provide. Communicate privately with other members (PM). See fewer ads. Sign Up!