[vhedward]

Prepaid Insurance account began the year with a balance of $230. During the year,
Insurance in the amount of $570 was purchased. At the end of the year (12/31), the
Amount of insurance still unexpired was $350. Prepare the year end adjusting entry.

[pready]

First you need to calculate the amount of Prepaid insurance. Take the beginning balance, then add what was purchased. You know the unexpired amount of Prepaid Insurance to the adjusting entry will be the difference between what your account says you have and your actual amount of unexpired insurance.

The entry will be: Debit Insurance expense for the amount and Credit Prepaid Insurance for the amount.