[rsca]

Unexpired insurance premiums amounted to $1,800 as of December 31.


Prepaid Insurance: $2400.00
Insurance expanses: $900.00

Should adjustment bemade as:

Prepaid Insurance: $1500.00
Insurance expanses: $900.00

[morgaine300]

Again, the information is not totally clear. You have to indicate what is what.

Unexpired insurance premiums amounted to $1,800 as of December 31.

Prepaid Insurance: $2400.00
Insurance expanses: $900.00

Are these your unadjusted balances? If so, whatever is already in the expense account is not relevant. The fact that you have it listed both here, and below in your entry makes me wonder where this 900 is coming from. Was it already in the account before your entry or did you do this?

Should adjustment bemade as:

Prepaid Insurance: $1500.00
Insurance expanses: $900.00

No. That's not even a "common error." I don't know where you got the 1500 from. Looks like you subtract 900 from 2400. Subtracting those doesn't have any meaning. And NEVER, EVER do entries that don't have equal debits & credits. If you learn nothing else, at least get that one down: they must have equal debits & credits. So this entry could never possibly be correct.

You also aren't stating which is the debit and which is the credit. If it's not stated, I'm going to assume the debit is listed first, because that's the typical way it's done. If your debit is first, then it's backwards. And the dollar amounts aren't correct.

By saying there's 1800 of prepaid insurance at Dec 31, they are saying that's the amount of insurance that is considered to be prepaid as of Dec. 31. i.e. that's the amount not already expired and which belongs into the new year. Therefore, that's the amount that needs to be in the account.

So there's two ideas you can get off this. One is that you must remove the difference between what was in the account and how much is currently prepaid. That is, you're "catching up" the balance to what it should be, which is 1800. You'll always be crediting that account to remove the portion that is no longer prepaid. The second idea is that same number is also what's expired. So that goes into Insurance Expense as a debit. And they have to be the same number. The amount expired is the same number that both goes to the expense and comes out of the prepaid.

Looking at some of your other entries, it looks to me like you're attempting to put balances into entries, which you can never do, and you're not making the entries be equal debits & credits. Adjusting entries are still just entries and must follow the same rules and properties of any other entry. Their goal is to change balances in accounts.