On January 1, a company purchased a five-year insurance policy for $2,200 with coverage starting immediately....

 

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On January 1, a company purchased a five-year insurance policy for $2,200 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Prepaid Insurance, $440; credit Insurance Expense, $440. Debit Prepaid Insurance, $2,200; credit Cash, $2,200. Debit Insurance Expense, $440; credit Prepaid Insurance, $440. Debit Insurance Expense, $440; credit Prepaid Insurance, $1,760. Debit Prepaid Insurance, $1,760; credit Insurance Expense, $1,760. On January 1, a company purchased a five-year insurance policy for $2,200 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Prepaid Insurance, $440; credit Insurance Expense, $440. Debit Prepaid Insurance, $2,200; credit Cash, $2,200. Debit Insurance Expense, $440; credit Prepaid Insurance, $440. Debit Insurance Expense, $440; credit Prepaid Insurance, $1,760. Debit Prepaid Insurance, $1,760; credit Insurance Expense, $1,760.

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