Williams Company paid $$24,000$ for a two$-$year insurance policy on October $1$ and recorded the $$24,000$ as a debit to Prepaid Insurance and a credit to Cash.

What adjusting entry should Williams make on December $31,$ the end of the accounting period $($no previous adjustment has been made$)?$

A$)$ Prepaid Insurance $24,000$

Insurance Expense $24,000$

B$)$ Insurance Expense $3,000$

Prepaid Insurance $3,000$

C$)$ Prepaid Insurance $4,000$

Insurance Expense $4,000$

D$)$ Insurance Expense $12,000$

Prepaid Insurance $12,000$

 

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The adjusting en... View the full answer