The balance in the prepaid insurance account before adjustment at the end of the year is $6,400, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is:

Insurance Expense $6,400 (debit)

Prepaid Insurance $6,400 (credit)

Explanation:

The Prepaid Insurance Account is an Asset Account. This is because it represents economic resources controlled by the firm as a result of past events (payment of insurance in advance) from which economic benefits are expected to flow into the business (insurance services).

As the Insurance is utilized, the Asset account decreases whilst the Expense Account Insurance Expense increases. The following journal entry shows how this happens.

Insurance Expense $6,400 (debit)

Prepaid Insurance $6,400 (credit)

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.