Corporation Comp Prob Purchase Insurance – Journal Entry Purchase Insurance

Corporation comprehensive problem purchase of insurance where we will enter the journal entry related to the purchase of insurance. We will journalize the journal entry to the general journal, post the accounting transaction to the general ledger, and create the trial balance from the general ledger. The journal entry will debit prepaid insurance, an asset, and credit cash. We do not debit insurance expense because we have not yet consumed the insurance and therefore should not record an expense according to the matching principle, one of the core accrual principles related to when to record expenses. We will record insurance expense at the end of the period with the use of adjusting entries, debiting insurance expense and crediting prepaid insurance, increasing the expense and decreasing the asset.
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