Arnez Company’s annual accounting period ends on December 31, 2017. The following information concerns the adjusting...

90.2K

Verified Solution

Question

Accounting

Arnez Company’s annual accounting period ends on December 31,2017. The following information concerns the adjusting entries tobe recorded as of that date.
An analysis of the company's insurance policies provided thefollowing facts.

Policy Date of Purchase Months of Coverage Cost
A April 1, 2015 24 $ 11,832
B April 1, 2016 36 10,584
C August 1, 2017 12 9,432

Answer & Explanation Solved by verified expert

4.3 Ratings (944 Votes)

Insurance policy A purchased on April 1 2015 It has coverage of 24 months It means that the policy covers period from April 1 2015 to March 31 2017 Monthly expense for the policy is 11832 24 493 When the policy was purchased on April1 2015 the following journal entry was made Journal entry on April 1 2015 Debit Prepaid insurance 11832 Credit Cash 11832 Now On December 31 2017 we will book the journal entry for 3 months of insurance ie January 2017 February 2017 and March See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Policy	Date of Purchase	Months of Coverage	Cost
A	April 1, 2015	24	$	11,832
B	April 1, 2016	36		10,584
C	August 1, 2017	12		9,432