close · Drill 15 of 20 · 4 min
Consume the prepayment
The $6,000 annual policy was booked to Prepaid on March 1. Post March’s consumption.
Taught in Accruals, prepayments, reversing journals
This try
Recognize one month of the $6,000 prepaid insurance.
Debit Insurance $500, credit Prepaid expenses $500.