Trans Company debited prepaid insurance for $1,320 on July 1, 2017 for a one-year fire insurance...
Trans Company debited prepaid insurance for $1,320 on July 1, 2017 for a one-year fire insurance policy, if the company prepares monthly financial statements, failure to make an adjusting entry on July 31 for the amount of insurance that has expired would cause?
Homework Answers
| expired insurance | |||||||
| 1320/12*1 | |||||||
| 110 | |||||||
| expenses would be understated by $110 and assets would be over | |||||||
| stated by $110 | |||||||
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Trans Company debited prepaid insurance for $1,320 on July 1,
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Simba Inc. purchased a two year fire insurance policy for $7,200 on July 1, 2014 effective immediately and credited Cash and debited Insurance Expense for the full amount on July 1, 2014. The Prepaid Insurance had a balance of $6,000 on January 1, 2014 for a previous policy that expired on June 30, 2014. What is the adjusting entry, if any, that is required on December 31, 2014?
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