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An analysis of the company's insurance policies provided the following facts.

Policy Date of Purchase Months of Coverage Cost
A April 1, 2010 24 \$11,640
B April 1, 2011 36 \$9,624
C August 1, 2011 12 \$9,240

The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)

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#### Solution Preview

I am betting that you need the adjusting entries, even though the question got cut off. The adjusting entries would be calculated as follows:

Insurance Expense -- Policy A 11640 * 9/24 4365 DR
Prepaid Insurance 4365 ...

#### Solution Summary

The solution provides the exact adjusting entries needed for the insurance policies purchased. This solution is written based on 25+ years of professional experience as an accountant and an auditor.

\$2.19