Complete question:
At December 31, 2013, before any year-end adjustments, Macarty Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be
A.$1,500. B.$1,200. C.$2,700. D.$1,900
Answer:
The adjusted balance for Insurance Expense for the year would be $1,500
Explanation:
The investment of premium costs ends each year with a null investment and rises as the account is debited over the year. The balance in the accrued asset plan will continue by the close of the financial year before the next financial year.
When you purchase an premium, debit an rise in the benefit in your accrued expense account. And the Bank statement is listed to indicate financial deficit. Change the accounts every month to the sum of the scheme.
The adjusting entry would recognise insurance expense of $1,500
