On May 1 of the current year, a two-year insurance policy was purchased for $24,000 with coverage to begin immediately. What is the amount of insurance expense that appears on the company’s income statement for the current year ended December 31? a. $4,000 c. $12,000 e. $24,000 b. $8,000 d. $20,000

Q: A Company paid or collected during the current year the following items: Insurance premium paid…

A: Salary expense on the income statement for the current year = Ending Salaries payable + Salary paid…

Q: Transmute Company paid or collected during the current year the following items: Insurance premium…

A: Salaries paid = Salaries expense + Beginning Salaries payable - Ending Salaries payable So, Salaries…

Q: Mackenzie Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1.…

A: Insurance expense on december 31 = Total premium paid x no. of months / period of insurance = $15000…

Q: Save o EXIT On January 1, a company purchased a five-year insurance policy for $2,300 with coverage…

A: Prepaid expenses are those expenses which are paid in advance for future period of time. This is one…

Q: Transmute Company paid or collected during the current year the following items: Insurance premium…

A: Insurance paid = Insurance expense + Ending prepaid insurance - Beginning prepaid insurance So,…

Q: company has a fiscal year-end of December 31: (1) on October 1, $20,000 was paid for a one-year fire…

A: Journal entry is the practice of recording commercial transactions for the first time in the books…

Q: A Company paid or collected during the current year the following items: Insurance premium paid…

A: Insurance premium paid is 15,400 out of 1,200 belongs to the next period. But 1,500 was paid earlier…

Q: e ............... September 1, 2021 Period of time coverage is for ............................... 3…

A: Requirement 1 Date Account Name Debit  Credit Sep-01 Prepaid Insurance 1925     To Cash…

Q: 1. A company has a fiscal year-end of December 31: (1) on October 1, $13,000 was paid for a one-year…

A: Journal is the primary book where the transactions are originally recorded. A journal is used to…

Q: The company pays $300,000 for an insurance policy that will cover the subsequent year.  For each…

A: According to accounting equation, assets equal to sum of liabilities and shareholders equity.

Q: On January 1, DogMart Company purchased a two-year liability insurance policy for $13,560 cash. The…

A: The Prepaid Insurance is the amount the firm had paid in advance for the insurance expenses, the…

Q: Prepare journal entries for each of the following transactions for a company that has a fiscal…

A: No. Account Titles and explanation Debit Credit 1. Prepaid Insurance $12,000…

Q: Ihowse Company paid $6,000 on June 1 for a one year insurance policy and recorded the transaction to…

A: Adjusting entries are prepared by the business entity at the end of the accounting period. These are…

Q: isurance Company collected a premium of $18,000 for a 1-year insurance policy on April 1. What…

A: The revenue and expenses are to be recorded in the period when they are due.

Q: eptember 1, Lazy A Incorporated paid $2,200 for a one year insurance policy. The journal entry to…

A: Solution: Insurance paid for a year is insuranve paid in advance or prepaid imsurance. This is an…

Q: On January 1st, XYZ Co. prepays $1,500 for one year of prepaid insurance. What is the amount of…

A: Formula: Income statement: All revenues and expenses are shown in income statement. It tells the net…

Q: Multiple Choice Quiz: On May 1 of the current year, a two-year insurance policy was purchased for…

A: Prepaid expense:   Prepaid expense means future expenses which are paid in advance. Initially,…

Q: On June 1. 20x1, MaScare Company paid $3.600 for an insurance policy on some equipment that will be…

A: Prepaid Expenses are those expenses which are paid in advance for future period of time. Initially…

Q: A company has a fiscal year-end of December 31: (1) on October 1, $26,000 was paid for a one-year…

A: Adjusting entries are recorded at the end of period in order to make sure that the company accounts…

Q: On May 1, a two-year insurance policy was purchased for $9,600 with coverage to begin immediately.…

A: Insurance expense is the amount of insurance premium which is expired in the given time period. It…

Q: Smokey Company purchases a one-year insurance policy on July 1 for $12,552. The adjusting entry on…

A: Adjusting entries are the journal entries that made at the end of the year in order to recognise the…

Q: On May 1 of Year 1 Mills Enterprises paid $3,780 cash for an insurance policy that would provide…

A: May 1 Year 1 to Dec. 31 Year 1 = 8 months Insurance expired = $3,780*8/12 Insurance expired = $2,520…

Q: An analysis of Puge Co.'s unadjusted prepaid expense account at December 31, 20x3, revealed the…

A: Prepaid Expenses: It is possible to pay for an expenditure in one accounting period, but the…

Q: the first day of Month 1, a business had prepaid insurance of $10,000. On the first day of Month 8,…

A: Amt of insurance exp charged to profit loss = Opening prepaid expense amortized + annual insurance…

Q: On January 1, DogMart Company purchased a two-year liability insurance policy for $34200 cash. The…

A: Assets: Assets are the resources of an organization used for the purpose of business operations.…

Q: Insurance in the amount of $60,000 was  purchase annually and paid for up front on April 1st. a)…

A: Prepare the journal entry to record the payment of insurance in advance.

Q: Chabon Corp. purchased a six-month insurance policy on December 1, 20X1 for $600 in cash. The policy…

A: Prepaid Expenses :— It is the expense that is paid in advance for the expenses that are not accrued…

Q: X Company prepares monthly financial statements. The following transactions occurred on October 1:…

A: Adjusting entries are those journal entries which are passed at the end of the period for the…

Q: c. The beginning balance of Office Supplies was $2,300. During the year, Betterton purchased office…

A: Adjusting entries are considered as the changes to the already recorded journal entries. It helps to…

Q: The prepaid insurance account had a balance of $11,200 at the beginning of the year. The account was…

A: As per accounting principle expenses should be booked only on the basis of respective financial year…

Q: On March 31, Bob Company paid for a one-year insurance policy that begins April 1. Bob's journal…

A: Prepaid expenses are those expenses which are being paid in advance for future period of time. This…

Q: a. The prepaid Insurance account shows a total of 48,000 representing the cost of a one-year…

A: Adjusting Entry – Adjusting Entries are the entries that make the accrual principle work for the…

Q: Smokey Company purchases a one-year insurance policy on July 1 for $11,136. The adjusting entry on…

A: Adjusting Entry – Adjusting Entries are the entries that make the accrual principle work for the…

Q: Under Edelbert company’s accounting system, all insurance premiums paid are debited  to prepaid…

A: Prepaid insurance are in the nature of Current Assets which are adjusted against insurance expenses…

Q: On January 2, 2016, Tucson Co. purchased a general liability insurance policy for $3,600 for…

A: Journal Entries are primary record maintained by an entity for the occurrence or non-occurrence of…

Q: On January 1, DogMart Company purchased a two-year liability insurance policy for $10500 cash. The…

A: Prepaid expense: Prepaid expense means future expenses which are paid in advance. Initially, Prepaid…

Q: On January 1, DogMart Company purchased a two-year liability insurance policy for $14,640 cash. The…

A: Insurance Expense = Prepaid InsuranceTerm of Insurancex No of months lapsed

Q: Requlred Informatlon [The following Information apples to the questions displayed below.] A company…

A: Compute the amount of monthly insurance expense.

Q: Assume that on February 1, Procter & Gamble (P&G) paid $720,000 in advance for 2 years’…

A: Journal Entries means a record of all business transactions in the accounting books of the business.…

Q: A company has a fiscal year-end of December 31: (1) on October 1, $13,000 was paid for a one-year…

A: The financial transactions are initially recorded in the form of journal entry and posted to the…

Q: 45. South Company reported that all insurance premiums paid are debited to prepaid insurance. The…

A: As specified in the question, any amount of premium paid during the year is debited to Prepaid…

Q: On October 1, Hughes Company paid $12,000 for two years of insurance in advance. Hughes Company…

A: From October 1 to December 31 = 3 months   Insurance expense will be recognized for 3 months on…

Q: A company has a fiscal year-end of Dec. 31:  (1) On Oct. 1, $12,000 was paid for a one-year fire…

A: Journal: Recording of a business transactions in a chronological order.

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is