Ask Experts Questions for FREE Help !
Ask
    phantasma's Avatar
    phantasma Posts: 3, Reputation: 1
    New Member
     
    #1

    Oct 14, 2008, 11:15 AM
    How would I record an entry
    How would I recoed an entry for dec.31st , for a policy bought for 7,200 on October 1st?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #2

    Oct 18, 2008, 01:56 PM

    if the policy is for insurance I would Debit Prepaid Insurance for the amount and Credit Cash (if cash was paid) or Accounts Payable (if on account) on October 1.

    if there were no other transactions posted during the accounting period then I would figure out how much of the policy was used.

    If the Policy was for 1yr then I would take the $7,200 X 3(months Used)/12(months in a year) which equals $1,800.

    The adjusting entry in this case is:
    Debit the Insurance Expense account for 1,800
    Credit the Prepaid Insurance account for 1,800

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Journal Entry to Record Estimated Quarterly Income tax [ 5 Answers ]

I need to record an estimated quarterly income tax payment and am not sure of what the entry would be. Any help would be greatly appreciated. Dr?? Cr Cash for the payment Thanks

How to record a free rent in Journal Entry [ 1 Answers ]

If I have a 5 year of lease and one month free rent per year, how do I record this? We are used to recording: CR: Other Account receivable DR: rent expense. It seems to me something missing?. Appreciate your help..

Entry to record company year-end 401K contribution [ 2 Answers ]

What is the correct entry to record our company year-end contribution to our 401K plan? Thanks.

Journal entry to record in transaction [ 3 Answers ]

July 9th Office Supply Corp delivers furniture ($1,060) and expendable office supplies ($160) to Random Leaving an invoice for $1220. The journal entry to record the July 9th transaction will include a credit of $1,220 to what account?? I’m pretty sure that it’s Accounts...

Record of Allowance for Doubtful Accounts entry [ 3 Answers ]

If a firm discovers that one of its accounts totaling $350 should be written off as uncollectible, if using an aging of receivables, the firm determines that the ending balance of the Allowance for Doubtful Accounts should be ($1,000). I'm also given that these is already $828 in Allowance for...


View more questions Search