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a 12-month insurance policy was purchased on dec. 1 for $3,600 and the prepaid insurance account was increased for the payment. demonstrate the required adjusting journal entry on dec. 31 by selecting from the choices below. multiple choice question. insurance expense would be debited for $3,600. cash would be credited for $3,600. insurance expense would be debited for $300. prepaid insurance would be credited for $3,600.
a 12-month insurance policy was purchased on dec. 1 for $3,600 and the prepaid insurance account was increased for the payment. demonstrate the required adjusting journal entry on dec. 31 by selecting from the choices below. multiple choice question. insurance expense would be debited for $3,600. cash would be credited for $3,600. insurance expense would be debited for $300. prepaid insurance would be credited for $3,600.
The adjustingjournal entrythat needs to be made on December 31 for the 12-month insurance policy that was purchased on December 1 for $3,600 and was credited to the prepaid insurance account is todebittheinsurance expense accountfor $300 and credit the prepaid insurance account for $300.This is because the insurance policy covers a period of 12 months, and as of December 31, only one month has passed, which means that the company has used only one-twelfth of the prepaidinsuranceamount, which is $300.By adjusting the prepaid insurance account and recognizing theexpensefor the month, thefinancial statementswill reflect the correct amount of expenses incurred during the period. It's important to make these adjustments in a timely and accurate manner to ensure that the financial statements are reliable and useful for decision making.To know more aboutjournal entryrefer here:brainly.com/question/15889958#SPJ11...