Multiple Choice
On January 1, 2015, Peach Company purchased a five-year insurance policy for $5,000.If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2015 is:
A) Debit Prepaid Insurance, $1,000; credit Insurance Expense, $1,000.
B) Debit Prepaid Insurance, $1,800; credit Cash, $1,800.
C) Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000.
D) Debit Prepaid Insurance, $360; credit Insurance Expense, $360.
E) Debit Insurance Expense, $360; credit Prepaid Insurance, $360.
Correct Answer:
Verified
Correct Answer:
Verified
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