Prepaid  Insurance

In this example you will be asked to supply answers to questions about prepaid expenses. You will receive immediate feedback about your answers.

The scenario:
On July 1, 2003, Mythical paid $2,400 for insurance that will be in effect for two years from the date of the payment. Assume that the payment was properly recorded as an asset.

Please compute and enter the number of months of expense in the current year

How much should be recognized as an expense in each month?
Enter your answer with a dollar sign

What account would you debit in your adjusting entry? Hint: what happens to assets over time?
Enter the account name using only lower case characters.