Answer:
Journal entries
Explanation:
The journal entries are as follows
On July 1
Prepaid insurance Dr $12,400
To Cash $12,400
(Being the payment is recorded)
On December 31
Insurance expense Dr $3,100
To Prepaid insurance $3,100
(Being the insurance expense is recorded)
It is computed below:
= $12,400 × 6 months ÷ 24 months
= $3,100
