On July 1, 2014, Bass Company paid a two-year insurance premium. On that date the following journal entry was made:
The annual accounting period ends on December 31, 2014.
Required:
A. How much of the premium should be reported as expense on the 2014 income statement?
B. What is the amount of prepaid insurance that should be reported on the balance sheet at December 31, 2014?
C. Prepare the adjusting entry that should be made on December 31, 2014, assuming no adjusting entries have been made during the year.

Question

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The Answer of On July 1, 2014, Bass Company paid a two-year insurance premium. On that date the following journal entry was made:
The annual accounting period ends on December 31, 2014.
Required:
A. How much of the premium should be reported as expense on the 2014 income statement?
B. What is the amount of prepaid insurance that should be reported on the balance sheet at December 31, 2014?
C. Prepare the adjusting entry that should be made on December 31, 2014, assuming no adjusting entries have been made during the year.

On July 1, 2014, Bass Company Paid a Two-Year Insurance