If, at year-end, the unexpired insurance were $20, the company should record an adjusting entry that
The year-end trial balance for Beltway Corporation appears as follows:
Beltway Corporation
Trial Balance
December 31
Debit Credit
Cash $ 300
Accounts Receivable 500
Prepaid Insurance 60
Supplies 140
Equipment 4,000
Accumulated Depreciation, Equipment $ 800
Accounts Payable 300
Common Stock 1,000
Retained Earnings 1,400
Service Revenue 3,000
Salaries and Wages Expense 1,000
Rent Expense 500
$6,500 $6,500
A) debits Insurance Expense for $20 and credits Prepaid Insurance for $20.
B) debits Prepaid Insurance for $20 and credits Insurance Expense for $20.
C) debits Insurance Expense for $40 and credits Prepaid Insurance for $40.
D) debits Prepaid Insurance for $40 and credits Insurance Expense for $40.
E) debits Insurance Expense for $20 and credits Cash for $20.
Ans: C) debits Insurance Expense for $40 and credits Prepaid Insurance for $40.
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