On April 30,2014,a three-year insurance policy was purchased for $18,000 with coverage to begin immediately.What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31,2014?
A)$500
B)$4,000
C)$6,000
D)$14,000
E)$18,000

Question

Quizplus · Accepted Answer

The insurance expense for the year ended December 31, 2014, is $4,000, which is 1/3 of the total premium of $18,000.

On April 30,2014,a Three-Year Insurance Policy Was Purchased for $18,000