On December 31, an adjusting entry will show a debit insurance expense for $400—the amount that expired or one-sixth of $2,400—and will credit prepaid insurance for $400.

Trip cancellation insurance reimburses you for any prepaid expenses if you have to cancel an upcoming trip. These costs can include things like airline tickets, hotel reservations and prepaid ...

Insurance is generally prepaid as companies may purchase it on a six-month, one-year or multiyear term. The total amount of prepaid insurance is not recorded as an immediate expense at the time of ...