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QUESTION
On August 1,2015. Steward Company paid $6320 for three-year insurance policy. Steward recorded this payment by debiting Insurance Expense and...
On August 1,2015. Steward Company paid $6320 for three-year insurance policy. Steward recorded this payment by debiting Insurance Expense and crediting Cash. Show the related adjusting journal entry that will be required on December 31, 2015.
SolutionDate Account Titles & Explanation Debit 31, Dec. 2015 Prepaid Insurance $5,442 Insurance Expense Credit $5,442 ExplanationSteps 1 – The cost of $6,320 is divided by the 36 months that...