What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, € 20,500, and unexpired amounts per analysis of policies of €4,000?
A) Debit Insurance Expense, € 4,000; Credit Prepaid Insurance, € 4,000.
B) Debit Insurance Expense, € 20,500; Credit Prepaid Insurance, € 20,500.
C) Debit Prepaid Insurance, € 16,500; Credit Insurance Expense, € 16,500.
D) Debit Insurance Expense, € 16,500; Credit Prepaid Insurance, € 16,500.

Question

Quizplus · Accepted Answer

The expired portion of the prepaid insurance is €20,500 - €4,000 = €16,500. Therefore, the adjusting entry should debit Insurance Expense and credit Prepaid Insurance for €16,500.

What Is the Proper Adjusting Entry at June 30, the End