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

    Feb 24, 2009, 01:10 PM
    Prepaid insurance journal entry
    The amount in prepaid insurance represents the remainder of a 3-year plicy purchsed july1, 2006


    In the unadjusted trial balance December 31, 2008 the amount is 30,600 for prepaid insurance.

    My question is what journal entry would you do here?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #2

    Feb 25, 2009, 05:23 PM

    YOu need to calculate how much of the Prepaid insurance has been used.

    Take the cost / 3 yrs to get the yearly cost then take that amount * number of months used in the year / 12 months in the year.

    Then you need to do an adjusting entry to record that amount of insurance that was used during the period.

    The journal entry is:
    Debit Insurance Expense for the amount of insurance used during the period
    Credit Prepaid Insurance for the same amount
    amarchouhan's Avatar
    amarchouhan Posts: 4, Reputation: 1
    New Member
     
    #3

    Mar 26, 2012, 03:33 AM
    Insurance premium paid on 1st July entry will be

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!

Adjusting entry for prepaid expense [ 1 Answers ]

If I am adjusting my prepaid expense, I would debit my prepaid expenses for the amount I'm adjusting but what would I credit? I know normally you would credit prepaid insurance or whatever the expense is for but I do not have an account of pre-paid insurance.. is there such a thing of making an...

Prepaid expense correct entry [ 2 Answers ]

I'm still not clear of how to correct the prepaid expense. Let's say... I paid 20,000 for 5 years of insurance and I charge all to expense account on the first year... the correct entry should be: First year... Debit insurance expense 4,000 Debit prepaid insurance 16,000 Credit R.E...

Prepaid insurance [ 1 Answers ]

You buy 10,000 worth of insurance for 2 years on April 1 . I need to journalize these transactions on April 1st than on Dec. 31st. I need to make adjusting entries on accounts except cash listing T-accounts and doing the balance sheet first.

Prepaid insurance [ 2 Answers ]

I have a problem... I am renewing my company's insurance policy and I am paying 25% downpayment of the premium in Sept. and the rest in 10 monthly installments. When I pay down the 25% do I record this is prepaid insurance? Also, the 10 monthly installments should be recorded as insurance...


View more questions Search