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What will be the adjustment entry for the business

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Reference no: EM132726156

Problem 1: On 1st February 2020 a business paid its insurance agent $2,400 for the annual insurance premium covering the twelve-month period beginning on 1st February. The $2,400 payment was recorded on 1st February with a debit to the current asset?Prepaid Insurance?and a credit to the current asset?Cash. The business prepares financial statements on 30th June 2020. What will be the adjustment entry for this business?

Option a) DR Prepaid Insurance $1000
CR Insurance Expense $1000

Option b) DR Interest Payable $1000
CR Interest Expense $1000

Option c) DR Interest Expense $2000
CR Interest Payable $2000

Option d) DR Insurance Expense $1000
CR Prepaid Insurance $1000

Reference no: EM132726156

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