The prepaid insurance account had a balance of $18,400 at the beginning of the year. The account was increased for $52,600 for premiums on policies purchased during the year. What is the adjustment required at the end of the year for each of the following independent situations?

For (a) and (b), indicate whether each account is increased or decreased and the amount of the increase or decrease.

a.  The amount of unexpired insurance applicable to future periods is $22,600.

Account	increase/decrease	Amount
Insurance expense	increasedecreaseincrease	$fill in the blank 2
Prepaid insurance	increasedecreasedecrease	$fill in the blank 4

b.  The amount of insurance expired during the year is $62,700.

Account	increase/decrease	Amount
Insurance expense	increasedecreaseincrease	$fill in the blank 6
Prepaid insurance	increasedecreasedecrease	$fill in the blank 8

Answer rating: 100% (QA)

Lets approach this by calculating the necessary adjustments for each scenario For Scenario a Given B... View the full answer