The solution to problem 4-4A is now available.
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What is new in 4-4A are the following accounts:
- Prepaid Insurance.
- Accumulated Depreciation.
Prepaid Insurance is considered an Asset and is amortized for N periods. Reporting this account simply takes about one line in the Balance Sheet. Accumulated Depreciation, on the other hand, is a contra-account to an asset, as it is meant to be used to show the amount of depreciation over a range of periods. Reporting an asset with Accumulated Depreciation takes about two lines in the Balance Sheet, the value of the asset is stated first followed by the depeciation amount. A total is carried over to the next column.
Accounting 