M4-24 Progression of Prepaid Expenses over Several Periods [LO2, LO4, LO5]
Midwest Manufacturing purchased a three-year insurance policy for $30,000 on January 2, 2009. Assume the January 2, 2009, balances in T-accounts for prepaid insurance, insurance expense, cash, and retained earnings were $0, $0, $90,000, and $80,000, respectively.
Required:
(a)
Prepare journal entries, adjusting journal entries, and closing journal entries required on January 2, 2009, December 31, 2009, and December 31, 2010.(Omit the “$” sign in your response.)