Question

The balance in the prepaid insurance account, before adjustment at the end of the year, is $18,420. The year end is March 31.

Journalize the March 31 adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $15,780; (b) the amount of unexpired insurance applicable to future periods is $2,640. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Supplies
14	Prepaid Insurance
15	Land
16	Equipment
17	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Unearned Fees
23	Salaries Payable
24	Taxes Payable

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividend

a) Journalize the March 31 adjusting entry required when the amount of insurance expired during the year is $15,780. Refer to the Chart of Accounts for exact wording of account titles.

Date Descriptions   Pos. Ref. Deposit Credit   1.   Adjusting Entries

2.

3.

b) Journalize the March 31 adjusting entry required when the amount of unexpired insurance applicable to future periods is $2,640. Refer to the Chart of Accounts for exact wording of account titles.

Date Descriptions   Pos. Ref. Deposit Credit   1.   Adjusting Entries

2.

3.

Answer 1