What should happen if the insurance premium was not paid prior to closing?

If the insurance premium was not paid prior to closing, the appropriate action is to debit the buyer. This is because, at closing, all expenses related to the property are typically settled. If the insurance premium is due but has not been paid, it becomes a cost that the buyer will eventually need to cover as part of their ownership responsibilities.

Debiting the buyer accounts for the fact that, from the closing date onward, the buyer will be responsible for maintaining insurance coverage on the property. It's a standard practice in transactions to ensure that all debts and obligations tied to the property are accounted for, so that the buyer assumes all necessary payments associated with the property after closing.

In contrast, crediting the seller or opting for no entry does not reflect the financial responsibilities that the buyer inherits upon taking ownership, and debiting the seller implies that they owe something despite not having received the premium, which is not the case in this scenario.