prepaid insurance

Abcfitz44 · #1 Jun 23, 2008, 02:05 PM

I have to complete a work sheet and a couple of my adjustments state:
a) Prepaid insurance represents a three year policy purchsed April 1, 19X1
b) the cost of equipment is being depreciated over a 15-year estimated life using the straight-line method. salvage value is ignored.

The account balances as of March 31, 19X2(end acct. per.):
Prepaid Insurance $360
Equipment $15,000
Accumulated Depreciation- Equipment $4,500
I'm just not understanding what they want me to do here, I do understand how to do adjustments and the straight-line method, I'm just not sure what entries I should be making for my adjustments.

This is not for homework, thank you!

Criado · Jun 28, 2008, 11:32 AM

You should recognized the expire portion of the insurance from Apr 1, 19X1 to March 31, 19X2; and accumulated depreciation for the equipment.

Abcfitz44 · Jun 28, 2008, 06:43 PM

i ended up getting it almost right after i sent this post.... i just forgot to sent something about it.... but thank you anyway... sorry about that! have a good one!



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