At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insura

Question

At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $6,480 and Insurance Expense of $0. The insurance was purchased on July 1 and provides coverage for 24 months.

Prepare the adjusting journal entry on December 31. (If no entry is required for atransaction/event, select "No Journal Entry Required" in the first account field.)

At December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $6,480 and Insurance Expense of $0. The insurance was purchased on July 1 and provides coverage for 24 months.

Explanation / Answer

Details Amt $ Preapid Insurance Amount           6,480 Coverage 24 months Insurance amortization/month 270 Insurance amortization required fron Jul 1 to Dec31 -for 6 months           1,620 Adjusting Journal entry on Dec31 Date Account Dr$ Cr $ Dec31. Insurance Expense           1,620 Preapid Insurance         1,620

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