Avalon Event Planning Services records deferred expenses and deferred revenues using the alternative treatments.It makes adjusting entries as needed to bring its books to the full accrual basis once a year at the end of the year.On October 1,it paid $3,700 for insurance for a one-year period.At the end of the year,it will make an adjusting entry that debits Insurance Expense for $1,850.

Question

Quizplus · Accepted Answer

Prepaid Expense = $3,700 × 6/12 = $1,850

Avalon Event Planning Services Records Deferred Expenses and Deferred Revenues