A business pays its insurance premium of $2,400 on November 1 of each year. On January 1 of the new year (after December 31 adjustments), the Prepaid insurance account has a debit balance of
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A business pays its insurance premium of $2,400 on November 1 of each year. On January 1 of the new year (after December 31 adjustments), the Prepaid insurance account has a debit balance of
2/12 of the premium has expired, of course consider what happens if the premium is non refundable
The amount of premium unexpired will be the cost times 10/12 for 10 months remaining on the policy.
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