insurance company annual statements
help with this a, b, c, d, e?
On 1 April 2007, a company pays the premium of $ 1,350 in an insurance policy with benefits for three years from of that date. What will the cost of insurance on annual income statement for the year ended 31 December 2007? $ 1,350. $ 450. $ 1012.50. $ 337.50. $ 37.50. That one above
$ 337.50 ———- ——- Prepaid insurance $ 1,350 is good for 3 years = 36 months for each month, the policy is indeed cost ($ 1,350 / 36) = $ 37.50 in 2007, the policy was in effect for 9 months, so that expenditure should be recorded is (9 x $ 37.50) = $ 337.50 ———- ——– The adjusting entry at year end would be: Debit Expenditure 'Insurance' $ 337.50 prepaid credit 'Insurance' $ 337.50
EXCHANGES #545 15 USC CHAPTER 2B – SECURITIES EXCHANGES
