Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance

Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries?

A) Debit Insurance Expense and credit Prepaid Insurance for $1,750.

B) Debit Prepaid Insurance and credit Insurance Expense for $1,750.

C) Debit Insurance Expense and credit Accounts Payable for $4,200.

D) Debit Insurance Expense and credit Prepaid Insurance for $2,450.

Answer: A

Which of the following would not typically be used as an adjusting entry?

A) Debit Rent Expense and credit Prepaid Rent.

B) Debit Cash and credit Deferred Revenue.

C) Debit Interest Expense and credit Interest Payable.

D) Debit Deferred Revenue and credit Service Revenue.

Answer: B