Reference no: EM132911693

Dion Ltée is making adjusting entries for the current year ended December 31. In developing information for the adjusting entries, the accountant learned the following:

• Dion renewed its one-year insurance policy and paid $3,960 on October 1, of the current year for a one-year insurance policy with coverage beginning on that date. The company paid $3,900 on October 1 of the previous year for the same insurance coverage.

At December 31 of the current year, the following data relating to shipping supplies were obtained from the records and supporting documents.

Shipping supplies on hand, January 1 of current year$15,600Purchases of shipping supplies during the current year 75,200Shipping supplies on hand, counted on December 31 of the current year 12,600

Required:

Problem 1. Prepare the adjusting entry for insurance at December 31 of the current year, assuming that the bookkeeper debited the full amount paid on October 1 of the current year to prepaid insurance. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)