Solved:
Answered by AI, Verified by Human Experts
On july 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. what will be the insurance expense on the annual income statement for the first year ended december 31? question 35 options: A.$1,200. B.$2,400. C.$1,000. D.$400. E.$1,400.
On july 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. what will be the insurance expense on the annual income statement for the first year ended december 31? question 35 options: A.$1,200. B.$2,400. C.$1,000. D.$400. E.$1,400.
Final answer:Theinsuranceexpenseon the company's annual income statement for the first year would be $1,200 as the premium covers a full year but the accounting period covers only six months of that year.Explanation:The question is regarding the calculation of the insurance expense on a company'sannual incomestatement based on the premium paid for a one-year insurance policy that begins on July 1. The company paid a $2,400 premium for theinsurance policy. As the policy starts in July and ends in December, this covers a period of 6 months within the first year. The insurance expense for this period is thus half of the $2,400premium, as the payment covers a full year but only half of that year falls within the accounting period in question. Therefore, the insurance expense on the annual income statement for the first year ended December 31 would be $1,200.Option ALearn more aboutBusiness Financehere:brainly.com/question/31424918#SPJ11...