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Question
On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the financial statements would report:
a. Insurance Expense, $4,800; Prepaid Insurance $0.
b. Insurance Expense, $3,600; Prepaid Insurance $1,200.
c. Insurance Expense, $3,650; Prepaid Insurance $4,800.
d. Insurance Expense, $1,200; Prepaid Insurance $3,600.
Answer
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