Prepaid Insurance

Code: 1144
👁 Views: 44

Account Information

Account Type Statement of Financial Position
Normal Balance Debit

Definition

Insurance premiums paid in advance to cover future periods

Common Journal Entries

Pay insurance premium in advance

Dr. Prepaid Insurance
Cr. Bank Account

Amortize prepaid insurance

Dr. Insurance Expense
Cr. Prepaid Insurance

Renew insurance policy

Dr. Prepaid Insurance
Cr. Cash in Hand

Year-end insurance adjustment

Dr. Insurance Expense
Cr. Prepaid Insurance

Pay insurance premium in advance

Dr. Prepaid Insurance
Cr. Bank Account

Amortize prepaid insurance

Dr. Insurance Expense
Cr. Prepaid Insurance

Renew insurance policy

Dr. Prepaid Insurance
Cr. Cash in Hand

Year-end insurance adjustment

Dr. Insurance Expense
Cr. Prepaid Insurance