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What are the journal entries for the following problem? Purchased a two-year building insurance policy on...

What are the journal entries for the following problem?

Purchased a two-year building insurance policy on November 1st for $391,000 cash.

[Adjusting Entry Required]

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Journal Adjusting Entry: (Assuming Calendar Year)

Insurance Expenses Debit ($391000/24*2) $32583

Prepaid Insurance Credit $32583

Explanation:

Insurance Paid for 24 Months is $391000. However (Assuming Calendar Year and entry being posted for year end), Two months insurance needs to be amortized which will reduced prepaid insurance balance.

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