Answer:
(A) Debit Insurance expense $20,250
Credit Prepaid insurance $20,250
Being entries to recognize insurance amortization expense for the year.
(B) Debit Insurance expense $20,250
Credit Prepaid insurance $20,250
Being entries to recognize insurance amortization expense for the year.
Explanation:
Prepaid insurance account before adjustment = $27,000
(A) the amount of insurance expired during the year is $20,250
To account for the expired amount,
Debit Insurance expense $20,250
Credit Prepaid insurance $20,250
Being entries to recognize insurance amortization expense for the year.
(B) the amount of unexpired insurance applicable to future periods is $6,750
Amount expired = $27,000 - $6,750
= $20,250
To account for the expired amount such that the amount of unexpired insurance applicable to future periods is $6,750,
Debit Insurance expense $20,250
Credit Prepaid insurance $20,250
Being entries to recognize insurance amortization expense for the year.
The journal entries of both the cases are given in the image below:
What journal entries?
A journal entry is an act of making records of any transactions which is occurred in cash or credit. Transactions are numbered in an accounting journal that presents a company's debit and credit balances.
The journal entry can belong to various recordings, each of which is either a debit or a credit.
(A). Here, the amount of insurance expenses will be debited, and the prepaid insurance would be credited with the amount of $20,250.
(B). Here, also the amount of insurance expenses will be debited, and the prepaid insurance would be credited with the same amount of $20,250 ($27,000-$6,750).
Learn more about journal entries, refer:
https://brainly.com/question/17439126
