Gadget Company pays $2,000 on January 1st. This $2,000 is for insurance that will cover all of
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Question:
Gadget Company pays $2,000 on January 1st. This $2,000 is for insurance that will cover all of January and all of February. Answer the following:
- What accounts would be involved here?
- What would the journal entry be?
- What would the journal entry be on January 31st?
- Explain in writing what took place, aka, why are the accounts that are used in the initial journal entry used? Why was expense recognized when it was?
Expert Answer:
Accounts Involved Prepaid Insurance Asset Account Cash Asset Account Insurance Expense Expense Accou... View the full answer
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