[kthymae8]

Preparing Adjusting Entries at Year-End

Paid P24, 000 for a 1-year fire insurance policy to commence on Sept. 1. The amount of premium was debited to Prepaid Insurance.

[pready]

You would have to divide your cost for fire insurance and divide it by 12 to get the monthly rate, then take this number and times it by 4 to get 4 months of insurance used (Sep, Oct, Nov, & Dec).

Your accounts for the adjusting entry will be; Insurance Expense and Prepaid Insurance.