deepak_123
Jul 31, 2010, 06:38 AM
What will be the journal entry of prepaid insurance
pready
Jul 31, 2010, 12:33 PM
When you purchase the insurance it will be: Debit Prepaid Insurance for the amount and Credit Cash for the amount.
When you are doing adjusting entries you have to calculate the amount of insurance used during a period. The journal entry will be: Debit Insurance Expense for the amount of insurance used during the period and Credit Prepaid Insurance for the amount.