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mountaineer excavation operates in a low-lying area that is subject to heavy rains and flooding. because of this, mountaineer purchases one year of flood insurance in advance on march 1, paying $24,000 ($2,000/month).required:1.

Respuesta :

The prepaid insurance is $24,600.

The insurance cost is $20,500.

What is the prepaid insurance and insurance cost of the mountaineer?

These are the journal entries:

1. Prepaid insurance A/C Dr. $24,600 as of March 1

To deposit $24,600 into the account (To record the purchase of insurance in advance)

2. Insurance cost A/c Dr. $20,500 on December 31.

$20,500 for insurance that was prepaid (To record the insurance expense)

Workings:

Cost of insurance: $2,050 multiplied by 10 months (from March 1 to December 31) is $20,500.

To learn more about prepaid insurance, refer

https://brainly.com/question/24205581

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