please answer correct with full explanation computation formula with stepsThe premium on a three-year insurance policy expiring on December 31, year 3, was paid in total on January 1, year 1. The originalpayment was initially debited to a prepaid asset account. The appropriate journal entry has been recorded on December 31, year 1.The balance in the prepaid asset account on December 31, year 1, should beO Zero.O The same as the original payment.O The same as it would have been if the original payment had been debited initially to an expense account.O Higher than if the original payment had been debited initially to an expense account.

Any expenses which are paid in advance that is before it becomes due are considered prepaid…

Answered: The premium on a three-year insurance…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Under ABC Company’s accounting system, all insurance premiums paidare charged to insurance expense. Information for the year endedDECEMBER 31, 2020 is as follows: prepaid insurance, beg. is P150,000;renewal of insurance charged to expense during the year applicable forthe period April 1, 2020 - 2021 is P500,000. What is the insurance expenseusing the accrual basis accounting? A. P275,000B. P500,000C. P525,000D. P650,000E. answer not given
An examination of Insurance Policies of Standard Company is presented below: Policy Date of Purchase Life of Policy Cost September 1, 2019 4years P25,920 May 1, 2020 2years 18,960 July 31, 2020 1year 9,720 Prepaid Insurance was debited for the cost of each policy at the time of its purchase. Expired insurance was correctly recorded at the end of 2019. What is the balance of Prepaid Insurance at the end of 2020?
1. An insurance policy, good for one year, was purchased on April 1, 2020 and has a valueof $25,000.a) Write the journal entry to record the original purchase of the insurance policy onApril 1.b) Write the adjusting journal entry required on April 31, 2020 to reflect the use of onemonth of the insurance service. What, concerning Insurance, would appear on theBalance Sheet? What would appear on the Income Statement?c) Write the adjusting journal entry required on May 31, 2020 to reflect the use of onemore month of the insurance service. What, concerning Insurance, would appear onthe Balance Sheet? What would appear on the Income Statement?
the following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note. PAGE 22 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Oct. 1 Interest Expense 710 203,264.00 ↓ 2 Notes Payable 215 499,298.00 ↓ 3 Cash 110 702,562.00 ↓ Using the information provided, compute the following amounts. 1. What was the carrying amount (book value) of the installment note before the payment on October 1? 2. What portion of next year’s payment will be interest? (Round the amount to the nearest dollar.) can you show me how to work through this problem?
Journalize the amortization of the premium/discount on December 31, 20X1. (If necessary, round to the nearest dollar.)
Calculation of interest over 360 days is called …………. Fill in the blank provided.A) Actual interestB) DiscountC) Commercial interestD) Interest for the periodE) Professional interest
The premium on a 3-year insurance policy expiring on December 31, 2022 was paid in total on January 1, 2020. The original payment was initially debited to prepaid insurance. The appropriate adjusting entry had been recorded on December 31, 2020. Which statement will be incorrect? *A. Insurance expense increased by amount equivalent to 1 year on December 31, 2020.B. Prepaid insurance balance on December 31, 2020 should be the same as it would have been if the original payment had been debited initially to an expense account.C. Prepaid insurance balance on December 31, 2021 is lower than the balance on December 31, 2020.D. none of the above
The рroduction deрartment of an insurance comрany reрorted Ρhр 45,121.00 insured рolicy by an insurance agent. What was the commission rate of the agent who receives Ρhр 3,390 as his commission last month.
The premium on a two-year insurance policy expiring on June 30, 2015, was paid in total on July 1, 2013. The original payment was debited to the insurance expense account. The appropiate journal entry has been recorded on December 31, 2013. The balance in the prepaid asset account on December 31, 2013, should be Group of answer choices 1.lower than if the original payment had been initially debited to an asset account 2.higher than if the original payment had been initially debited to an asset account 3.the same as it would have been if the original payment had been initially debited to an asset account. 4.the same as the original payment
8. The premium on a 3-year insurance policy expiring on December 31,2022 was paid in total on January 1, 2020. The original payment wasinitially debited to prepaid insurance. The appropriate adjusting entry hadbeen recorded on December 31, 2020. Which statement will be incorrect? A. Insurance expense increased by amount equivalent to 1 year on December 31, 2020. B. Prepaid insurance balance on December 31, 2020 should be the same as it would have been if the original payment had been debited initially to an expense account. C. Prepaid insurance balance on December 31, 2021 is lower than the balance on December 31, 2020. D. none of the above
On September 1, 2020, Mr. Chu paid P62,940 worth of insurance premium for two years. a. Using the Asset Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal Entry on December 31, 2020. b. Using the Expense Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal Entry on December 31, 2020.
On September 1, 2020, Mr. Chu paid P62,940 worth of insurance premium for two years.a. Using the Asset Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal Entry on December 31, 2020.b. Using the Expense Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal Entry on December 31, 2020.

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