Ask Me Help Desk

Ask Me Help Desk (https://www.askmehelpdesk.com/forum.php)
-   Finance & Accounting (https://www.askmehelpdesk.com/forumdisplay.php?f=411)
-   -   Prepaid insurance journal entry (https://www.askmehelpdesk.com/showthread.php?t=321532)

  • Feb 24, 2009, 01:10 PM
    snfinch
    Prepaid insurance journal entry
    The amount in prepaid insurance represents the remainder of a 3-year plicy purchsed july1, 2006


    In the unadjusted trial balance December 31, 2008 the amount is 30,600 for prepaid insurance.

    My question is what journal entry would you do here?
  • Feb 25, 2009, 05:23 PM
    pready

    YOu need to calculate how much of the Prepaid insurance has been used.

    Take the cost / 3 yrs to get the yearly cost then take that amount * number of months used in the year / 12 months in the year.

    Then you need to do an adjusting entry to record that amount of insurance that was used during the period.

    The journal entry is:
    Debit Insurance Expense for the amount of insurance used during the period
    Credit Prepaid Insurance for the same amount
  • Mar 26, 2012, 03:33 AM
    amarchouhan
    Insurance premium paid on 1st July entry will be

  • All times are GMT -7. The time now is 10:04 AM.