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    deepak_123's Avatar
    deepak_123 Posts: 1, Reputation: 1
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    #1

    Jul 31, 2010, 06:38 AM
    Prepaid insurance
    What will be the journal entry of prepaid insurance
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Jul 31, 2010, 12:33 PM

    When you purchase the insurance it will be: Debit Prepaid Insurance for the amount and Credit Cash for the amount.

    When you are doing adjusting entries you have to calculate the amount of insurance used during a period. The journal entry will be: Debit Insurance Expense for the amount of insurance used during the period and Credit Prepaid Insurance for the amount.

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