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On January 2 2016 Tucson Co  Insurance Expense 3,300 Prepaid Insurance 3,300\begin{array}{r}\text { Insurance Expense } &3,300\\\text { Prepaid Insurance }&&3,300 \\\end{array}

Question 24

Short Answer

On January 2 2016 Tucson Co. purchased a general liability insurance policy for $3600 for coverage for the calendar year. The entire $3600 was charged to Insurance Expense on January 2 2016. If the firm prepares monthly financial statements the proper adjusting entry on January 31 2016 will be: a.  Insurance Expense 3,300 Prepaid Insurance 3,300\begin{array}{r}\text { Insurance Expense } &3,300\\\text { Prepaid Insurance }&&3,300 \\\end{array}

b.  Prepaid Insurance 3,300 Insurance Expense 3,300\begin{array}{r}\text { Prepaid Insurance }&3,300 \\\text { Insurance Expense }&&3,300\end{array}

c.  Insurance Expense 300 Prepaid Insurance 300\begin{array}{l}\text { Insurance Expense }&300 \\\text { Prepaid Insurance }&&300 \\\end{array}

d.  Prepaid Insurance 300 Insurance Expense 300\begin{array}{l}\text { Prepaid Insurance }&300 \\\text { Insurance Expense }&&300\end{array}

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