Wilson Company paid $5,800 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $5,800, and no adjustments had been made previously. The adjusting entry required on December 31 is:

Question

Answer

Debit Insurance Expense, $2,900; credit Prepaid Insurance, $2,900.

Answer

Debit Prepaid Insurance, $1,450; credit Insurance Expense, $1,450.

Answer

Debit Cash, $5,800; Credit Prepaid Insurance, $5,800.

Answer

Debit Prepaid Insurance, $2,900; credit Insurance Expense, $2,900.

Answer

Debit Insurance Expense, $1,450; credit Prepaid Insurance, $1,450.

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Wilson Company paid $5,800 for a 4-month insurance premium in advance on Novembe...

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