What Is the Proper Adjusting Entry at June 30, the End

question 75

Multiple Choice

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, € 20,500, and unexpired amounts per analysis of policies of €4,000?

• A) Debit Insurance Expense, € 4,000; Credit Prepaid Insurance, € 4,000.
• B) Debit Insurance Expense, € 20,500; Credit Prepaid Insurance, € 20,500.
• C) Debit Prepaid Insurance, € 16,500; Credit Insurance Expense, € 16,500.
• D) Debit Insurance Expense, € 16,500; Credit Prepaid Insurance, € 16,500.

---

Definitions:

Bank Holiday

A day on which banks are officially closed, observed as a public holiday.

Coolidge and Hoover

Refers to Calvin Coolidge and Herbert Hoover, two U.S. Presidents known for their policies during the 1920s and the onset of the Great Depression, respectively.

Dust Bowl

A period of severe dust storms that greatly damaged the ecology and agriculture of the US and Canadian prairies during the 1930s, causing widespread economic hardship among farmers.

Anti-Lynching Laws

Legislation intended to prevent lynching, a form of violent, extrajudicial punishment typically motivated by racial prejudice, though historically such laws have been difficult to enforce.