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    yankz's Avatar
    yankz Posts: 3, Reputation: 1
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    #1

    Nov 11, 2010, 07:54 PM
    Accounts
    The prepaid insurance account, before the 2007 adjusting journal entries showed a balanced of 2000. An analysis of the insurance policies showed that 400 of unexpired benefits remain on the policies at December 31. The adjusting journal entry to reflect this journal entry would be?
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    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Nov 11, 2010, 08:15 PM

    Our guidelines for homework state that you must try to do the homework first and then seek help.

    https://www.askmehelpdesk.com/financ...-b-u-font.html

    To figure out the entry needed, you know that the current balance in prepaid is $2,000. The unexpired benefits mean the amount of insurance that has not been used, which is the amount Prepaid. Please ask if this is confusing for you, and I'll explain it in detail. You want your Prepaid account to become $400. What is the adjustment to get there? Would you debit or credit Prepaid to lower it? Again, ask if this is confusing. I can explain how it works. The only other question then is what other account is involved. I'd like to see if you can guess that. I'll be happy to help you if you will tell me what you are thinking first. That way, you either understand it or I can see what is confusing you and offer help. Thanks.
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