Answered: The company pays $300,000 for an…

The company pays $300,000 for an insurance policy that will cover the subsequent year. Provide the journal entry that would be necessary to record the transaction.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 11Q: If the Prepaid Insurance account had a balance of $12,000, representing one years policy premium,...

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Question

The company pays $300,000 for an insurance policy that will cover the subsequent year.

Provide the journal entry that would be necessary to record the transaction.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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