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    ClearyIUP's Avatar
    ClearyIUP Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 19, 2007, 08:26 AM
    Prepaid Insurance
    Hey, just wondering how I find Insurance expense & Prepaid insurance when when
    Jan 1st the balance is $600 and I
    Apr. 30 is $2,400.
    HELP please:(
    manik chand dey's Avatar
    manik chand dey Posts: 63, Reputation: 2
    Junior Member
    		  
    #2

    Jun 24, 2008, 08:29 PM
    On January 1, there is a prepaid insurance amounting to $600 for the month of January.So the journal entry will be
    Jan 1 Prepaid insurance a/c DR 600
    To cash a/c 600
    Similarly for each month through the month of April, prepaid insurance will be debited by $600. And on April 30, one adjustment entry will be passed.that is

    Insurance a/c DR 2400 (600*4)
    To prepaid insurance a/c 2400
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