Question

Insurance pf $450,000 was paid on May 1, 2018 for the 10-months to february 2019. how...

Insurance pf $450,000 was paid on May 1, 2018 for the 10-months to february 2019. how to work out the amount?

Homework Answers

Answer #1
Notes:
Insurance amount of Rs. $ 450,000 was paid as on 01.05.2018. This is an
prepaid expenses of the company. Insurance expenses can be charged to
the company at every month end or end of fiscal year of company.
Advance paid for insurance can recorded in books as below,
Solution:
Journal Entry of the same is done as below,
Date Account Title Debit Credit
May 01. 2018 Prepaid Insurance                 450,000
          Cash             450,000
(To Record the cash paid for insurance)
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