Sally's Alterations rents a building in the city of Toledo to provide top-notch services to customers. Sally pays rental insurance to protect against loss or damage to her inventory. She pays a yearly premium of $600 for her insurance policy. Sally paid the insurance amount, $600, for the full year on February 1 , which will be renewed on February 1 next year. On December 31, Sally needs to make an entry on the amount of insurance she used during the current year. Since she purchased the insurance on February 1, she didn't have the policy for a full year. She only needs to record the use of 11 months of the policy. To correct this, she'll need to record the expense of the insurance for 11 months only. When Sally purchased the insurance, she recorded the purchase transaction. To record the original purchase, she debited prepaid insurance and credited cash. What is her adjusting entry?

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The detailed answer for the above question is provided below Heres the adjusting entry Sally n... View the full answer