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Embree corp., purchased a four

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Answer:

Embree Corp. purchased a four-year insurance policy on May 1, Year 2, for $12,000, effective immediately. The company expensed the full cost of the policy in Year 2. The correct journal entry for Year 2 (ending December 31) will include a:

Explanation:

Debit to prepaid insurance of $10,000.

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