322 Insurance Payable

Liabilities

Accrued

Synopsis

Account 322 is established to record the amount of Insurance premiums payable or accrued to cover policies held by the dealership.

Debits

Credits

Example 1

Record the accrual of insurance premium expenses for the month in the amount of $8,250.

Journal: General Journal

Entry:		Debit	Credit
Account 085-01	Insurance – Buildings & Improvements – New Vehicle Department	$225
Account 085-02	Insurance – Buildings & Improvements – Used Vehicle Department	$188
Account 085-03	Insurance – Buildings & Improvements – Lease & Rental Department	$88
Account 085-05	Insurance – Buildings & Improvements – Mechanical Department	$225
Account 085-06	Insurance – Buildings & Improvements – Body Shop Department	$187
Account 085-07	Insurance – Buildings & Improvements – Parts & Accessories Department	$175
Account 085-09	Insurance – Buildings & Improvements – General & Administrative	$162
Account 088-01	Insurance – Insurance Other – New Vehicle Department	$1,470
Account 088-02	Insurance – Insurance Other – Used Vehicle Department	$1,050
Account 088-03	Insurance – Insurance Other – Lease & Rental Department	$140
Account 088-05	Insurance – Insurance Other – Mechanical Department	$1,330
Account 088-06	Insurance – Insurance Other – Body Shop Department	$700
Account 088-07	Insurance – Insurance Other – Parts & Accessories Department	$1,260
Account 088-09	Insurance – Insurance Other – General & Administrative	$1,050
Account 322	Insurance Payable		$8,250

Example 2

Record the payment of the above insurance premiums in the amount of $8,250.

Journal: Cash Disbursements and Purchase

Comments

A credit balance represents insurance premiums which have not been paid or applied against advance deposits.