[pkjk]

The prepaid insurance account had a balance of $8300 at the beginning of the year. The account was debited for $9200 for premiums on policies purchased during the year. Journalize the adjusting entry at the end of the year for insurance expense and prepaid insurance. The amount of unexpired insurance applicable to future period is $1500.

[pready]

First you have to determine the amount of prepaid insurance in your accounts, so take the beginning balance plus the amount of premiums purchased equals your Prepaid Insurance account balance.

Now you have to calculate the amount of insurance used, so take your Prepaid Insurance account balance minus the amount of unexpired insurance applicable to future periods to get your amount of insurance used or expired during the period.

Now you have to do your adjusting entry, which will be:
Debit Insurance Expense and Credit Prepaid Insurance for the amount of insurance used or expired during the period.

This adjusting entry will bring your Prepaid Insurance account into agreement with how much unexpired insurance there is for future periods.