Need help with accounting


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On July 1, 2011, Gavin Company purchased a 1 year insurance policy for $3,600. 

What adjusting entry would be made each month?

Nov 17th, 2017

On July 1, 2011, Gavin Company purchased a 1 year insurance policy for $3,600. 

What adjusting entry would be made each month?

Answer:

In the books of Gavin Company

Journal Entries

Date                    Particulars                                             LF                Debit ($)                          Credit($)

01/07/2011        Insurance Premium A/c             Dr                                3,000  

                                To Cash/Bank A/c                                                                                             3,000  

                        (Being Insurance Premium paid)      

Note: 

This is a one time entry. 

While preparing final accounts then only adjusting entry takes place.

Adjusting Entry depends on your accounting period:

Insurance Premium A/c            Dr                                   xxxxxxx

     To  Prepaid Insurance A/c                                                                                  xxxxxxx

     

Mar 28th, 2015

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