The prepaid insurance account had a balance of $11,700 at the beginning of the year. The account was increased for $7,800 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 each account affected, indicate whether the account is increased or decreased, and the amount of the increase or decrease. a. The amount of unexpired insurance applicable to future periods is $11,000.

a) The adjustments required at the end of the year for the transaction are:

Debit to Insurance Expense for $8,500 and Credit to Prepaid Insurance for $8,500.

b) For this transaction, the Prepaid Insurance account is decreased by $8,500 while the Insurance Expense is increased by $8,500.

Explanation:

a) Data and Calculations:

Prepaid Insurance    $11,700

Cash account              7,800

less Prepaid, ending  11,000

Insurance Expense  $8,500

commercial banking

provide online payment services

provide online banking

asset management firms

invest in people's funds in securities

accept tax return refunds

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