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28 October, 16:35

On April a company paid the 3150 premium on a three year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the first year ended December 31?

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  1. 28 October, 16:47
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    Answer: $787.5

    Explanation: On April a company paid the 3150 premium on a three year insurance policy with benefits beginning on that date.

    The amount of the insurance expense will be reported on the annual income statement for the first year ended December 31st will be calculated as:

    insurance policy is for 3 years i. e 36 months

    From April to December that year will be 9 Months

    Amount of insurance expense: 3150*9/36 = 787.5
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