On January 1, 2020, Peach Company Purchased a Five-Year Insurance

question 201

Multiple Choice

On January 1, 2020, Peach Company purchased a five-year insurance policy for $5,000. If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2020 is

• A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800
• B) Debit Prepaid Insurance, $1,000; credit Insurance Expense, $1,000
• C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360
• D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360
• E) Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000

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Definitions:

Communicative Peers

Colleagues who actively engage in sharing information, feedback, and support, facilitating open and effective workplace communication.

Immediate

Something occurring or done instantly without delay.

General Nature

The broad or overall characteristics or feelings of a subject, object, or environment.

Feedback

Information provided regarding aspects of one’s performance or understanding, intended to guide future improvements.