Business, 29.02.2020 02:01 322126

At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $9,360 and Insurance Expense of $0. The insurance was purchased on July 1 and provides coverage for 24 months. Required: Prepare the adjusting journal entry on December 31. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance.

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Answer from: katelynndonahue2393

Explanation:

Total insurance premium paid = 9360

Total Months = 24

Monthly Expense 9360/24 = 390

Expense to be recorded in books

for the current year ended of 6 months 390*6 = 2340

Prepaid insurance at closing date = 9360-2340 = 7020

Adjusting journal Entry

insurance Expense 2340

Prepaid Insurance 2340

To record the expense not recorded in books

T-Accounts

Prepaid Insurance

opening = 0

Cash 9360

Expense 2340

Closing bal. 7020

Insurance Expense

opening = 0

prepaid insurance 2340

profit/loss 2340

Closing bal. 0

Un-adjusted trail Balance

Debit Credit

Prepaid insurance 9360

adjusted trail Balance

Debit Credit

Prepaid insurance 7020

Insurance Expense 2340

Answer from: Quest

i'm pretty sure the answer is 60.

Answer from: Quest

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101

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