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    eacampbell's Avatar
    eacampbell Posts: 1, Reputation: 1
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    #1

    Jan 28, 2007, 05:08 PM
    Adjusting Balances
    How do I adjust a trial balance for unexpired insurance? What accounts would be affected and how do I get the appropriate amount for the debit and credit to those accounts?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jan 28, 2007, 06:18 PM
    On Jan 1, you buy a 13 month policy for $1,300.

    Dr. Prepaid Insurance 1,300
    Cr. Cash 1,300

    On Dec, 31, you need to recognize 12 of those 13 months are used up.

    Dr. Insurance Expense 1,200
    Cr. Prepaid Insurance 1,200
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