On January 1, 2013, Prepaid Insurance had a balance of $6,700 and on December 31, 2013, a balance of $8,320. The income statement for the year reported Insurance Expense of $49,310. Payments for insurance during the year amounted to:

Question

Quizplus · Accepted Answer

The payments for insurance during the year can be calculated by adding the insurance expense to the increase in prepaid insurance: $49,310 (Insurance Expense) + ($8,320 - $6,700) (Increase in Prepaid Insurance) = $50,930.

On January 1, 2013, Prepaid Insurance Had a Balance of $6,700