On July 1,2016,a firm purchased a 1-year insurance policy for $1,800 and paid the full premium in advance.The insurance expense associated with this policy for the year ending December 31,2016,is

Question

Quizplus · Accepted Answer

The insurance expense for the year ending December 31, 2016, is $900 because the policy covers 12 months, and only 6 months (July to December) fall within 2016. Therefore, $1,800/12 months * 6 months = $900.

On July 1,2016,a Firm Purchased a 1-Year Insurance Policy for $1,800