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    ice57's Avatar
    ice57 Posts: 4, Reputation: 1
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    #1

    May 17, 2009, 06:59 AM
    adjusting prepaid insurance
    I understand that for prepaid insurance is an asset and an expense adjustment must be made. I am being confused by a couple of detail in the equation.
    Prepaid Insurance Jan. 1 balance, company pays insurance on March 31, each year $3600, At Dec. 31, $600 is still prepaid. Can someone help me out.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    May 17, 2009, 01:34 PM

    If Dec 31 Balance is $600 in PrePaid Insurance, then your Jan 1 beginning balance will be the same amount as your Dec 31 ending balance.
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