Meyer Co. follows the practice of recording prepaid expenses and unearned revenues in balance… 1 answer below »
Meyer Co. follows the practice of recording prepaid expenses and unearned revenues in balance sheet accounts. The company's annual accounting period ends on December 31, 2011. The following information concerns the adjusting entries to be recorded as of that date.
a.
b.
An analysis of the company's insurance policies provided the following facts:
PolicyDate of PurchaseMonths of CoverageCostA April 1, 201024$15,840 B April 1, 20113613,068 C August 1, 2011122,700
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.)