Answer:
prepaid insurance = Â $2185
Explanation:
given data
premium to Insurance = $2,760
time period = 2 year
solution
first we get here insurance expense per year that is
insurance expense = [tex]\frac{premium}{time}[/tex]
insurance expense = [tex]\frac{2760}{2}[/tex]
insurance expense = $1380
and here insurance expenses for the year 2018 is
insurance expenses 2018 = [tex]\frac{expense\ per\ year}{12\ months}[/tex] × 2018 period
insurance expenses 2018 = [tex]\frac{1380}{12}[/tex] × 5
insurance expenses 2018 = $575
so
prepaid insurance is as
prepaid insurance = premium for insurance - insurance expense 2018
prepaid insurance = Â 2760 - 575
prepaid insurance = Â $2185
as adjusting entries are
date               account title               debit       credit
December 31, 2018  prepaid insurance          $2185
                  insurance expense                     $2185
