The document provides information to make adjusting journal entries for prepaid insurance and supplies for the year ended December 31, 2015. It states that $6,500 was paid for a two-year insurance premium on January 1, 2015. It also gives the unadjusted balances and year-end amounts on hand for supplies. The required questions are: 1) What amount should be reported as Insurance Expense and Prepaid Insurance on the year-end financial statements? 2) What amounts should be reported as Supplies Expense and Supplies on the year-end financial statements?

1. HELP!!
Hile Edi Fes Company is making adjusting joumal entries for the year ended December 31,
2015. In developing information or the ad jursting jounal entries, you learned the following a. A
two year insurance premiam of S6,500 was paid on January 1, 2015, for coverage beghning on
that dale Ps ol December 31, 2015, the unadjusted balances were $6,500 for Prepaid Insurance
and S0 for Insurance Exporee b Al December 31, 2015, you obtained the tolowing data relating
to supplies Unadjunsted balance in Supplies on December 31, 2015 11,500 65,000 7,200 balance
in Suppies Expense on December 31, 2015 Supplies on hand, counted on December 31, 2015
Required: 1Of he S6,500 paid for insurance, what amount should be reported on the 2015 nome
statement as reat xndpdnhe December 31,2015, balance sheet as Prepaid Insurance? Insurance
Expense Propaid Insurance 2 What amount should be reported on the 2015 income statoment as
Supplies Expense? What amount should be reported on the December 31, 2015, balance sheet as
Supplies?
Solution
Insurance Exp- $3,250
Prepaid Insurance- $3,250