What Is The Journal Entry To Adjust Prepaid Insurance. Adjustment entries in final accounts! The order of the journal entries could be different but they will be similar to this.
When the insurance policy is purchased, the debit is to the asset account: Prepaid expenses are current assets. The adjusting journal entry is done each month, and at the end of the year, when the insurance policy has no future economic benefits, the prepaid insurance would be 0.