Accounting: On April 1, a company paid $2,400 premium for a two year policy with benefits beginning that day. What will be the insurance expense on the annual income statement for the first year ended Dec 31?
Homework Answers
Insurance expense for 2 years = $2,400
Insurance expense for 9 months (April 1 to December 31) = 2,400 x 9/12
= $900
Insurance expense to be recorded for the first year = $900
Second option is correct.
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