Yao Company began operations on June 1, 20x1 and prepares monthly financial statements. It has the following partial unadjusted trial balance at June 30, 20x1: Debit Credit Prepaid insurance 6,000 Unearned service 2,900 revenue The balance in the prepaid insurance account relates to a 1-year insurance policy, effective June 1, 20x1. Which of the following would be the correct adjusting journal entry at June 30, 20x1 with respect to this insurance policy? Prepaid insurance Insurance expense 500 500 Prepaid insurance Cash 6,000 6,000 Insurance expense 500 Prepaid insurance 500 d) Insurance expense 500 Cash 500

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Yao Company began operations on June 1, 20x1 and prepares monthly financial statements. It has
the following partial unadjusted trial balance at June 30, 20x1:
Debit
Credit
Prepaid insurance
6,000
Unearned service
2,900
revenue
The balance in the prepaid insurance account relates to a 1-year insurance policy, effective June 1,
20x1. Which of the following would be the correct adjusting journal entry at June 30, 20x1 with
respect to this insurance policy?
Prepaid insurance
Insurance expense
500
500
Prepaid insurance
Cash
6,000
6,000
Insurance expense
500
Prepaid insurance
500
d)
Insurance expense
500
Cash
500
Transcribed Image Text:Yao Company began operations on June 1, 20x1 and prepares monthly financial statements. It has the following partial unadjusted trial balance at June 30, 20x1: Debit Credit Prepaid insurance 6,000 Unearned service 2,900 revenue The balance in the prepaid insurance account relates to a 1-year insurance policy, effective June 1, 20x1. Which of the following would be the correct adjusting journal entry at June 30, 20x1 with respect to this insurance policy? Prepaid insurance Insurance expense 500 500 Prepaid insurance Cash 6,000 6,000 Insurance expense 500 Prepaid insurance 500 d) Insurance expense 500 Cash 500
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