Toys for Boys,Inc.had prepaid insurance of $7,200 on January 1,2011.This amount relates to a 12-month insurance policy purchased on July 1,2010 for $14,400.On July 1,2011,Toys for Boys purchased more insurance coverage by paying $9,000 for a new one-year policy.The company's year ends on December 31,2011 and all adjustments for the whole year are made on that date so that financial statements can be prepared.What amount should appear on the December 31,2011 balance sheet as prepaid insurance? What amount should be reported on the year ended December 31,2011 income statement as insurance expense?

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The Answer of Toys for Boys,Inc.had prepaid insurance of $7,200 on January 1,2011.This amount relates to a 12-month insurance policy purchased on July 1,2010 for $14,400.On July 1,2011,Toys for Boys purchased more insurance coverage by paying $9,000 for a new one-year policy.The company's year ends on December 31,2011 and all adjustments for the whole year are made on that date so that financial statements can be prepared.What amount should appear on the December 31,2011 balance sheet as prepaid insurance? What amount should be reported on the year ended December 31,2011 income statement as insurance expense?