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Insurance Expired Trial Balance

How Would You Journalize Expired Insurance?

Enter transactions as debits or credits to the correct accounts.

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Insurance is an operating expense for companies. Companies purchase insurance coverage by paying insurance premiums and record related transactions accordingly. Depending on the length of the insurance purchased each time, companies may record the insurance for uses over multiple accounting periods. In other words, companies may have to journalize insurance expense periodically as the insurance expires over time, instead of expensing the total insurance purchase at once in a single period.

Prepaid Insurance

Insurance is generally prepaid as companies may purchase it on a six-month, one-year or multiyear term. The total amount of prepaid insurance is not recorded as an immediate expense at the time of the purchase when the insurance has not been used. The insurance coverage expires only with the passage of time. Thus, the total amount of cash spent on the insurance premium is not an expense in the current period. Companies simply have exchanged cash for the right to certain insurance coverage in the future.

Expired Insurance

Expired insurance during a period is recorded as an insurance expense for the same period. Companies lose, or are said to have consumed, their prepaid insurance coverage over time whether or not they have actually used it by filing any claims. Companies record expired insurance periodically based on the intersection of their accounting periods and the time structure of the insurance. At the end of the insurance term, the total insurance expires and companies would have fully recorded the total prepaid insurance as expenses over multiple periods.

Asset and Expense

While expired insurance in each accounting period is recorded as an expense and reported in the income statement, total prepaid expense is recorded as an asset at the time of the purchase and reported on the balance sheet. All assets provide certain utilities, and prepaid insurance as an asset affords companies the benefit of an insurance coverage. However, as the insurance expires over time, the amount of prepaid expense as an asset decreases.

Journal Entries

Companies use two sets of journal entries to record the insurance-related transactions, involving both prepaid insurance and expired insurance. When companies initially pay for the total insurance premium, a debit is entered to the asset account of prepaid insurance and a credit entered to the cash account for the cash spent. As the insurance expires over time, companies debit the expense account of expired insurance and credit prepaid insurance to reduce the balance in the asset account. At the end of the insurance term, the account of prepaid insurance should have a zero balance.

Adjusting Entries

Friday, September 16, 2016

Adjusting Entries Insurance Expired

ANSWERS TO QUESTIONS – Drexel University
Adjusting entries are prepared prior to the preparation of financial statements in order to bring the accounts up to date and are Expired Insurance; (b) Supplies Used; (c) Depreciation Expensed; (d) Admission Revenue ANSWERS TO QUESTIONS Author: Kurtz Family Last modified by: Jane . Document Retrieval

CHAPTER 6
ADJUSTING ENTRIES. To record expired insurance. To accrue one month’s interest on $100,000 note payable at 12% APR. Inventory . To record consumption of inventory items. Cost of goods sold. Depreciation exp. – Furniture & fixtures. Salaries and wages expense. . Retrieve Content

Www.homeworkmarket.com
The following information relates to year-end adjusting entries as of December 31, Six months’ worth of insurance has expired. Four months’ worth of rent has expired. Of the $1,300 of office supplies purchased on July 4, $250 remains. . Read Content

ACCOUNTING 201 – Everett Community College
ACCOUNTING 201 PRACTICE MIDTERM – (Covering Chapters 1 – 5) adjusting entry on July 31 for the amount of insurance that has expired would cause . a. Appropriate adjusting entries had been recorded in previous months. . Retrieve Here

Exercises: Set A – Professorwidman.com
Exercises: Set A E1A. E4A. Adjusting Entries for Prepaid Insurance -1. Insurance Expense 5,345 Prepaid Insurance 5,345 To record expired insurance s1o,2so 1 – 1 $4,935 I = I $5,345 2. Insurance Expense 1,735 ,– . View Doc

PROBLEM SET A – McGraw Hill Education
Problem set C . PROBLEM 4-1C . Use the following information to journalize and post adjusting entries for the month: a. One-half of one month’s insurance coverage has expired. b. The cost of expired insurance for the fiscal year is $3,800. . View Full Source

What Is The Difference Between adjusting entries And Closing .
What is the difference between adjusting entries and closing entries? in the asset account Prepaid Insurance. During the accounting period some of those premiums expired (were used up) . View Document

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Service Business Accounting Cycle Assume that you are starting a new business, Prepare the adjusting entries using the following on hand. b. Record the adjustment for expired rent of $2,500 for the month. c. Compute and record the adjustment for expired insurance for the month. . Return Document

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28 Click The Below Link In Description For Answers – YouTube
28 Click The below link In Description For Answers Anyssa Apryl. Subscribe Subscribed Unsubscribe 6 6. Loading What adjustment would be recorded for expired insurance? 3. What are prepaid expenses? Adjusting entries, unearned/accrued, revenue/expense – Duration: . View Video

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Adjusting entries are made in your accounting journals at the end of Adjusting Entries in your Accounting Journals. How to Make Adjusting Entries. By During the month when the office supplies are used, an adjusting entry is made to debit office supply expense and credit . Read Article

Adjusting Accounts For Financial . – McGraw Hill Education
03-P1: Prepare and explain adjusting entries. Framework for Adjustments. P 1. An adjusting entry is made at the end of an accounting period to reflect a transaction or event that is not yet recorded. insurance expired! P 1. After the adjustment, . Access Content

Problem 2 – McGraw Hill Education
Preparing Adjusting Entries. Florida Orange Country Club adjusts its accounts monthly and closes its accounts annually. Club members pay their annual dues in advance by January 4. Failed to record expired portion of prepaid rent expense. . Fetch Content

V 420 Click The Below Link In Description For Answers – YouTube
V 420 Click The below link In Description For Answers Anyssa Apryl. Subscribe Subscribed Unsubscribe 6 6. Loading Insurance expired during the year 1,250 Journalize and post the adjusting entries. . View Video

ExErcisEs: SEt B – Cengage Learning
ExErcisEs: sEt B Preparation of Closing Entries Complete the work sheet using the following information: expired insurance, $1; estimated depreciation on office equipment, $1; Adjusting Entries and Preparation of a Balance Sheet E8B. . Read Document

Ch.4 The Accounting Cycle For A Service Business (cont’)
Ch.4 The Accounting Cycle for a Service Business (cont’) 1 Adjusting entries using T-accounts Adjusting Entry for Insurance Expired 7 Prepaid Insurance Debit Credit + – Balance Amount of coverage expired Insurance Expense . Document Retrieval

Transfer Pricing – Wikipedia, The Free Encyclopedia
Transfer pricing is the setting of the price for goods and services sold between controlled (or related) Adjustment of prices is generally made by adjusting taxable income of all involved related parties within the jurisdiction, . Read Article

Accelerated Program Financial Accounting 1 – Imparano.com
Expired insurance, $2,200 (originally recorded as prepaid In the normal situation, to facilitate subsequent entries, the adjusting entry or entries that may be reversed is (are) a. Entry No. 3. b. Entries No. 3 and No. 4. c. Entry No. 4. d. Entries No. 2, No. 3, and No. 4. . Retrieve Document

The Ledger Of Ley Company Includes The Following Unadjusted .
The ledger of Ley Company includes the following unadjusted balances: Prepaid Insurance $3,000, Service Revenue $58,000, and Salaries Expense $25,000. Adjusting entries are required for (a) expired insurance $1,200; (b) . Read Document

Chapter 3: Accounting Information System – Binus University
If the amount in Insurance Expense is the January 31 adjusting entry and the original insurance premium was for Insurance expired during the year $ 480. Furniture and equipment is being From the trial balance and other information given, prepare annual adjusting entries as of December . Fetch Document

1210 Click The Below Link In Description For Answers – YouTube
1210 Click The below link In Description For Answers Thomas Clark. Subscribe Subscribed Unsubscribe 10 10. P3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO An analysis of WTI’s insurance policies shows that $2,750 of coverage has expired. b. . View Video

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Part 1 Comprehensive Problem 1 – Kelly Pitney began her consulting business, Kelly Consulting, P.C.

Kelly Pitney began her consulting business, Kelly Consulting, P.C. on April 1, 2014. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated on pages 163-173. During May, Kelly Consulting entered into the following transactions:
May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4500.

May 5. Received cash from clients on account, $2450.

May 9. Paid cash for a newspaper advertisement, $225.

May 13. Paid Office Station Co. for part of the debt incurred on April 5, $640.

May 15. Recorded services provided on account for the period of May 1-15, $9180.

May 16. Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750.

May 17. Recorded cash from cash clients for fees earned during the period May 1-16, $8360.

Record the following on Page 6 of the journal:

May 20. Purchased supplies on account, $735.

May 21. Recorded services provided on account for the period May 16-20, $4820.

May 25. Recorded cash from cash clients for fees earned for the period May 17-23, $7900.

May 27. Received cash from clients on account, $9520

May 28. Paid part-time receptionist for two weeks’ salary, $750.

May 30. Paid telephone bill for May, $260.

May 31. Paid electricity bill for May, $810.

May 31. Recorded cash from cash clients for fees earned for the period May 26-31, $3300

May 31. Recorded services provided on account for the remainder of May, $2650.

May 31. Paid dividends $10,500.

1. The chart of accounts for Kelly Consulting is shown on page 164, and the post-closing trial balance as of April 30, 2014, is shown on page 171. For each account in the post-closing trial balance, enter the balance enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2014, and place a check mark in the post reference column. Journalize each of the May transactions in a two- column journal using Kelly Consulting’s chart of accounts. (Do not insert the account numbers in the journal at this time.)

2. Post the journal to a ledger of four-column accounts.

3. Prepare and unadjusted trial balance.

4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. insurance expired during may is $275.

b. supplies on hand on May 31 are $715

c. Depreciation of office equipment for May is $330.

d. Accrued receptionist salary on May 31 is $325.

e. Rent expired during May is 1,600.

f. Unearned fees on May 31 are $3210.

5. (Optional). Enter the unadjusted trial balance on an end-of-period spreadsheet (worksheet) and complete the spreadsheet

6. Journalize and post the adjusting entries. Record the adjusting entries on page 7 of the journal.

7. Prepare an adjusted trial balance.

8. Prepare an income statement, retained earnings statement, and balance sheet.

9. Prepare and post the closing entries. Record the closing entries on page 8 of the journal (Income summary account is #34 in the chart of accounts). Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.

The chart of accounts for Kelly Consulting is shown on page 158, and the post-closing trail balance as of April 30, 2010 is shown on page 166. For each account in the post-closing trial balance, enter the balance in the appropriate balance column of a four column account. Date the balances May 1, 2010, and place a check mark in the posting referece column. Journalize each of the May transactions in a two column journal using Kelly Consulting’s chart of accounts. (do not insert the account numbers in the journal at this time.) Post the journal to a ledger of four-column accounts. Prepare an unadjusted trail balance At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts 5 and 6. Insurance expired during May is $300. Supplies on hand on May 31 are $600. Depreciation of office equipment for May is $330. Accrued receptionist salary on May 31 is $240. Rent expired during May is $1,600. Unearned fees on May 31 are $2,000 Enter the unadjusted trial balance on an end-of-period spreadsheet (worksheet) and complete the spreadsheet. Journalize and post the adjusting entries.

Kelly pitney began her consulting business, Kelly Consulting, on April 1, 2010. The accounting cylcle for Kelly Consulting for April , including financial statements was illistrated on page 157-168. During May, kelly consulting entered the following transactions:

May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,500.

  1. Received cash from clients on account, $1,750.
  2. Paid cash for a newspaper advertisement, $300.
  3. Paid office station company for part of the debt incurred on april 5, $400.
  4. Recorded services provided on account for the period May 1-15, $6,100.
  5. paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750.
  6. Recorded cash from cash clients for fees earned during the period May 1-16, $8,200.
  7. Purchased supplies on account, $400
  8. Recorded services provided on account for the period May 16-20, $3,900.
  9. Recorded cash from cash clients for fees earned for the period May 17-23, $5,100.
  10. Recieved cash from clients on account, $9,500.
  11. Paid part-time receptionist for two weeks salary, $750.
  12. Paid telephone bill for May, $120.
  13. Paid electricity bill for May $290.
  14. Recorded cash from cash clients for fees earned for the period May 26-31, $3,875.
  15. Recorded services provided on account for the remainder of May, $3,200.
  16. Kelly withdrew $8,000 for personal use.

Pg. 158 Chart of Accounts:

April 1. The following assets were recieved from Kelly Pitney: Cash, $13,100; Accounts receivable, $3,000; Supplies, $1,400; and office equipment, $12,500. there were no liabilities recieved.

  1. Paid three months rent on a lease rental contract, $4,800.
  2. Paid the premiums on property and casualty insurance policies, $1,800.
  3. Recieved cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000.
  4. Purchased additional office equipment on account from Office Station Co., $2,000.
  5. Recieved cash from clients on account, $1,800.
  6. Paid cash for a newspaper advertisement, $120.
  7. paid Office Station Co. for part of the debt incurred on April 5, $1,200.
  8. Recorded services provided on account for the period April 1-12, $4,200.
  9. Paid part-time receptionist for two weeks’ salary, $750.
  10. Recorded cash from cash clients for fees earned during the period April 1-16, $6,250.
  11. Paid cash for supplies, $800.
  12. Recorded services provided on account for the period April 13-20, $2,100.
  13. Recorded cash from cash clients for fees earned for the period April 17-24, $3,850.
  14. Recieved cash from clients on account, $5,600.
  15. Paid part-time receptionist for two weeks’ salary, $750.
  16. Paid telephone bill for April, $130.
  17. paid electricity bill for April, $200.
  18. Recorded cash from clients for fees earned for the period April 25-30, $3,050.
  19. Recorded services provided on account for the remainder of April, $1,500.
  20. kelly withdrew $6,000 for personal use.

Pg. 166 Post-closing trial balance

Accumualted depreciation.. 330

Accounts payable………….. 800

Salaries Payable………….. 120

Unearned Fees……………. 2,500

kelly pitney, Capital………. 42,300

Instructions:

  1. The chart of accounts for Kelly Consulting is shown on page 158, and the post-closing trail balance as of April 30, 2010 is shown on page 166. For each account in the post-closing trial balance, enter the balance in the appropriate balance column of a four column account. Date the balances May 1, 2010, and place a check mark in the posting referece column. Journalize each of the May transactions in a two column journal using Kelly Consulting’s chart of accounts. (do not insert the account numbers in the journal at this time.)
  2. Post the journal to a ledger of four-column accounts.
  3. Prepare an unadjusted trail balance
  4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts 5 and 6.
  5. Insurance expired during May is $300.
  6. Supplies on hand on May 31 are $600.
  7. Depreciation of office equipment for May is $330.
  8. Accrued receptionist salary on May 31 is $240.
  9. Rent expired during May is $1,600.
  10. Unearned fees on May 31 are $2,000
  11. Enter the unadjusted trial balance on an end-of-period spreadsheet (worksheet) and complete the spreadsheet.
  12. Journalize and post the adjusting entries.

7.Prepare an adjusted trial balance.

  1. Prepare an income statement, a statement of owner’s equity, and a balance sheet.
  2. Prepare and post the closing entries. (Income summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.
  3. Prepare a post-closing trial balance

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