Accounting Question??

Question

The balance in the prepaid insurance account, before adjustment at the end of the year is $4,280. Journalize the adjusting entry.

1) The amount of insurance expired during the year is $1,020.

Answer 1

Credit to Prepaid insurance (reducing value of remaining prepaid insurance policies)
Debit to Insurance Expense (showing amount expended for year)
Both for $1,020.

Sometimes testors will try and play games by giving you the remaining balance of the Prepaid Insurance account instead of the amount used during the year. If that is the case, you will need to subtract the ending balance from the beginning balance to get the amount used.
Example of that applied to your question: they would have given you a remaining balance of $3,260 (which is what you will have left in the Prepaid Insurance account once you update your ledger from the adjusting entries).