On February 1, 2017, a company paid an $21,600 premium on a 36-month insurance policy for coverage beginning on that date.

On February 1, 2017, a company paid an $21,600 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table. -Can Not Copy Table-- Table is for Balance Sheet-PrePaid Insurance And Income statement-Insurance expense

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Expert Solution

Balance Sheet			Income Statement
Prepaid Insurance			Insurance expense
	Accrual basis	Cash basis		Accrual basis	Cash basis
Dec 31, 2017	$15,000	$0	2017	$6,600	$21,600
Dec 31, 2018	$7,800	$0	2018	$7,200
Dec 31, 2019	$600	$0	2019	$7,200
Dec 31, 2020	$0	$0	2020	$600
			Total	$21,600	$21,600

--Working

Balance Sheet			Income Statement
Prepaid Insurance			Insurance expense
	Accrual basis	Cash basis		Accrual basis	Cash basis
Dec 31, 2017	=21600*25/36	0	2017	=21600*11/36	21600
Dec 31, 2018	=21600*13/36	0	2018	=21600*12/36
Dec 31, 2019	=21600*1/36	0	2019	=21600*12/36
Dec 31, 2020	0	0	2020	=21600*1/36

ekkarill92 answered 2 years ago

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