ACCOUNTING Question 136?

Question

At December 31, 2007, before any year-end adjustments, Bollis Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be

$1,200.

$1,900.

$2,700.

$1,500.

Answer 1

The adjusted balance of the insurance expense for the year would be $1500 because $1500 of the prepaid insurance was incurred.

If you meant the adjusted balance of the Prepaid Insurance it would be:

2700 - 1500 = $1200

Answer 2

$2,700