Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. The company immediately debited the Insurance expense account. By the end of the period, $400 of the policy had expired. Demonstrate the required adjustment needed at the end of the period
- Debit Prepaid insurance for $400.
-debit insurance expenses 400
-debit prepaid insurance 800
-credit prepaid insurance 800debit prepaid insurance 800