Please assist with the given problem.
Stone Works Tile Shop purchased two years of insurance coverage for its retail shop on July 1, 2004 iao of $3,600. Stone Works recorded the prepayment as an asset. Stone Works prepares its adjusting entries at year end December 31.
Q1. What adjusting journal entry is necessary at Dec 31,2004?
Q2. How much will be reported on the income statement for the year ended Dec 31, 2004 for insurance expense?
Q3. What adjusting journal entry is necessary at Dec 31, 2005.
Q4. How much will be reported on the balance sheet at Dec 31, 2005 for prepaid insurance?