Accounting: Adjusting entries
I am having trouble with this whole concept and problem, so if someone would walk me through it and explain it that would be great:
The prepaid insurance account had a balance of $5,400 at the beginning of the year. The account was debited for $6,000 for premiums on policies purchased during the year. Journalize the adjusting entry required at the end of year for each of the following situations: (a) the amount of unexpired insurance applicable to future periods is $1,000; (b) the amount of insurance expired during the year is $10,400.