Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and the Yahoo Answers website is now in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
Accounting Question (Adjusting Entries)...I am unsure of which entries are to be debited/credited?
Do I need to do anything with the beginning balance?
e) The Prepaid Insurance account shows the following entries on June 30:
Beginning Balance $1,530
January 1 2,900
May 1 3,366
The beginning balance represents the unexpired portion of a one-year policy purchased the previous year. The January 1 entry represents a new one-year policy, and the May 1 entry represents the additional coverage of a three-year policy.
3 Answers
- gogo7Lv 41 decade agoFavorite Answer
You start with the beginning balance. It will be a beginning balance for some period (which is the ending balance carried over from the previous period). That is the balance you are adjusting.
Then you increase or decrease the balance with your entries.
Hint for you here: is the account going to get bigger or smaller with each of the entry you need to make?
Another hint: Prepaid insurance is something you have paid for but haven't expensed yet but will write off over time.
- 1 decade ago
Yes. The beg balance will be credited each month over the policy period. The debit will be to expense. The amount of the credit and debit each month would be the total prepayment divided by the no. of months of the policy period.
- Anonymous5 years ago
If the unearned commission revenue is still unearned, I don't think an entry is needed. If the previous entry was for example 8,000 then the entry would need to be the difference between the two figures (250.00)
