Eve's Apples opened its business on January 1, 2018, and paid for two insurance policies effective that date. The liability policy was $36,000 for 18 months, and the crop damage policy was $12,000 for a two-year term. What is the balance in Eve's prepaid insurance as of December 31, 2018?
A) $9,000.
B) $18,000.
C) $30,000.
D) $48,000.

Question

Quizplus · Accepted Answer

Prepaid liability insurance: $36,000 × 6/18$ 12,000
Prepaid hazard insurance: $12,000 × 12/24 6,000
Total prepaid insurance at 12/31/18$ 18,000

Eve's Apples Opened Its Business on January 1, 2018, and Paid