On July 1, 2022. Ling Co. pays $12.400 to Marsh Insurance Co for a 2-year Insurance contract.

Discipline: Accounting

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 3-4)

Paper Format: APA

Pages: 1 Words: 275

Question


On July 1, 2022. Ling Co. pays $12.400 to Marsh Insurance Co for a 2-year Insurance contract. Both companies have fiscal year
e Textbook and Media
List of Accounts
Post the entry on July 1 and the adjusting entry on December 31 for Marsh Insurance Co.

Expert Answer
Step 1/2
Requirement 1:

Journalizing adjusting entries:
Date
Account Titles and Explanation
Debit
Credit
July.01
Prepaid Insurance
$12,400


Cash

$12,400

(To record prepaid insurance)






Dec.31
Insurance expense [12400*1/2*6/12]
$3,100


Prepaid Insurance

$3,100

(To record insurance expense)



Step 2/2
Final answer
The solution is provided in above steps