Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2018, and charged the $4,200 premium to Insurance expense. At its December 31, 2018, year-end, Yummy Foods would record which of the following adjusting entries?
B) $\begin{array}{|c|r|r|} \hline \text { Prepaid insurance } & 875 & \ \hline \text { Insurance expense } & & 875 \ \hline \end{array}$
C) $\begin{array}{|l|r|r|} \hline \text { Insurance expense } & 875 & \ \hline \text { Prepaid insurance } & 3,325 & \ \hline \text { Insurance payable } & & 4,200 \ \hline \end{array}$
D) $\begin{array}{|l|r|r|} \hline \text { Prepaid insurance } & 3,325 & \ \hline \text { Insurance expense } & & 3,325 \ \hline \end{array}$

Question

Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2018, and charged the $4,200 premium to Insurance expense. At its December 31, 2018, year-end, Yummy Foods would record which of the following adjusting entries?
B) $\begin{array}{|c|r|r|} \hline \text { Prepaid insurance } & 875 & \ \hline \text { Insurance expense } & & 875 \ \hline \end{array}$ 
C) $\begin{array}{|l|r|r|} \hline \text { Insurance expense } & 875 & \ \hline \text { Prepaid insurance } & 3,325 & \ \hline \text { Insurance payable } & & 4,200 \ \hline \end{array}$ 
D) $\begin{array}{|l|r|r|} \hline \text { Prepaid insurance } & 3,325 & \ \hline \text { Insurance expense } & & 3,325 \ \hline \end{array}$

Quizplus · Accepted Answer

11ea937b_3668_31d8_a419_25862816b73b_TB2599_00 Unused at 12/31: $4,200 × 19/24 = $3,325

Yummy Foods Purchased a Two-Year Fire and Extended Coverage Insurance Prepaid insurance 875 Insurance expense 875\begin{array}{|c|r|r|}\hline \text { Prepaid insurance } & 875 & \\\hline \text { Insurance expense } & & 875 \\\hline\end{array} Prepaid insurance Insurance expense ​875​875​​

Yummy Foods Purchased a Two-Year Fire and Extended Coverage Insurance $\begin{array}{|c|r|r|}\hline \text { Prepaid insurance } & 875 & \\\hline \text { Insurance expense } & & 875 \\\hline\end{array}$