$750 of insurance expense needs to be accrued. It was originally recorded as prepaid insurance. Do I just debit prepaid insurance and credit insurnace expense for $750??

Question

$750 of insurance expense needs to be accrued. It was originally recorded as prepaid insurance. Do I just debit prepaid insurance and credit insurnace expense for $750??

My other problem is adjustment was made to record interest expense on bonds payable for $500. The payment for the principal and interest rate are not due until next year... how would I journalize that ?

Answer 1

$750 of insurance expense needs to be accrued. It was originally recorded as prepaid insurance. Do I just debit prepaid insurance and credit insurnace expense for $750??

Expenses are always debits. So if it was originally prepaid, you should credit that and debit Ins.Exp.