Question

an accountant made the following adjustments at december 31, the end of the accounting period: view the adjustments. read the requirements. requirement 1. journalize the adjusting entries. (record debits first, then credits. exclude explanations from any journal entries.) a. prepaid insurance, beginning, $500. payments for insurance during the period, $2,000. prepaid insurance, ending, $400. accounts debit credit a. insurance expense 2,100 prepaid insurance 2,100 b. interest revenue accrued, $2,500. accounts debit credit b.

Explanation:

Step1: Calculate insurance expense for a

The formula to calculate insurance expense is Beginning Prepaid Insurance + Insurance Payments - Ending Prepaid Insurance. So, $500 + 2000-400 = 2100$. We debit Insurance Expense to record the expense and credit Prepaid Insurance to reduce the prepaid amount.

Step2: Journalize interest - revenue accrued for b

When interest revenue is accrued, we debit Interest Receivable (an asset account) to record the amount we are owed and credit Interest Revenue (a revenue account) to recognize the revenue.

Answer:

Accounts	Debit	Credit
Prepaid Insurance		2100
b. Interest Receivable	2500
Interest Revenue		2500