On January 18, 2018, MetroPlex paid $12,000 for a two-year insurance premium that covers February 1, 2018 through January 31, 2020. MetroPlex's year-end is March 31, 2018.
a. What is the effect on the accounting equation on January 18, 2018?
b. What is the effect of the adjustment on the accounting equation on March 31, 2018 before the financial statements are prepared for the year ending March 31, 2018?

Question

On January 18, 2018, MetroPlex paid $12,000 for a two-year insurance premium that covers February 1, 2018 through January 31, 2020. MetroPlex's year-end is March 31, 2018. 
a. What is the effect on the accounting equation on January 18, 2018?
b. What is the effect of the adjustment on the accounting equation on March 31, 2018 before the financial statements are prepared for the year ending March 31, 2018?

Quizplus · Accepted Answer

The Answer of On January 18, 2018, MetroPlex paid $12,000 for a two-year insurance premium that covers February 1, 2018 through January 31, 2020. MetroPlex's year-end is March 31, 2018. 
a. What is the effect on the accounting equation on January 18, 2018?
b. What is the effect of the adjustment on the accounting equation on March 31, 2018 before the financial statements are prepared for the year ending March 31, 2018?

On January 18, 2018, MetroPlex Paid $12,000 for a Two-Year