Question

At December 31, 2017, before any year-end adjustments, Novak Corp. Prepaid Insurance account had a balance of $7080. It was determined that $3170 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be_____________.

Answer 1

Answer:

$3170

Explanation:

Given that

Balance of prepaid insurance account = $7,080

Expired value of prepaid insurance = $3,170

So, the adjusted balance for Insurance Expense for the year is

= Expired value of prepaid insurance

= $3,170

The journal entry is shown below:

Insurance Expenses A/c Dr $3,170

            To Prepaid Insurance A/c $3,170

(Being the insurance expense is recorded)