EX 3-14 Adjusting entries for prepaid insurance
The balance in the prepaid insurance account, before adjustment at the end of the year, is $27.000. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:
(A) the amount of insurance expired during the year is $20,250;
(B) the amount of unexpired insurance applicable to future periods is $6,750.
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