Arnez Company’s annual accounting period ends on December 31,
2017. The following information concerns the adjusting...
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Accounting
Arnez Company’s annual accounting period ends on December 31,2017. The following information concerns the adjusting entries tobe recorded as of that date.
An analysis of the company's insurance policies provided thefollowing facts.
Policy
Date of Purchase
Months of Coverage
Cost
A
April 1, 2015
24
$
11,832
B
April 1, 2016
36
10,584
C
August 1, 2017
12
9,432
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Insurance policy A purchased on April 1 2015 It has coverage of 24 months It means that the policy covers period from April 1 2015 to March 31 2017 Monthly expense for the policy is 11832 24 493 When the policy was purchased on April1 2015 the following journal entry was made Journal entry on April 1 2015 Debit Prepaid insurance 11832 Credit Cash 11832 Now On December 31 2017 we will book the journal entry for 3 months of insurance ie January 2017 February 2017 and March
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