Prepaid insurance is personal nature of account and amount in it is shown as current asset in balance sheet.
No, it is a real/permanent account. Insurance expense is a nominal account.
Debit.
it is permanent
A prepaid expense account is an asset, thus not a temporary account either.
To adjust the prepaid insurance account, you need to recognize the amount of insurance that has expired during the fiscal year. Starting with a prepaid insurance balance of $14,000 and an unexpired insurance amount of $3,000, the expired insurance is $14,000 - $3,000 = $11,000. The proper adjusting entry would be a debit to Insurance Expense for $11,000 and a credit to Prepaid Insurance for $11,000.
No, it is a real/permanent account. Insurance expense is a nominal account.
Debit.
it is permanent
A prepaid expense account is an asset, thus not a temporary account either.
A prepaid expense account is an asset, thus not a temporary account either.
To adjust the prepaid insurance account, you need to recognize the amount of insurance that has expired during the fiscal year. Starting with a prepaid insurance balance of $14,000 and an unexpired insurance amount of $3,000, the expired insurance is $14,000 - $3,000 = $11,000. The proper adjusting entry would be a debit to Insurance Expense for $11,000 and a credit to Prepaid Insurance for $11,000.
balance sheet as a current liability until it's earned, when you transfer the amount earned to revenue.
Yes. All prepaid items go in current assets until they are used and transferred to the profit and loss.
Yes you can get insurance on prepaid phones.
asset, debit
No, prepaid insurance typically does not have a credit balance. Instead, it usually appears as an asset on the balance sheet with a debit balance, reflecting the amount paid in advance for insurance coverage. As time passes and the coverage is used, the prepaid insurance is expensed, reducing the asset balance. A credit balance in this account would indicate an overpayment or error.
debit insurance expense 10000 credit prepaid insurance 10000