Question

Blue Chip Investments purchased a 12-month insurance policy on June 1, 2019 for $3,480. The December 31, 2019 balance sheet would report Prepaid Insurance of a. $0 because Prepaid Insurance is reported on the Income Statement. b. $2,030. c. $1,450. d. $3,480.

Answer 1

Answer:

d. $3,480.

Explanation:

Given that

The insurance policy would be $3,480 for the 12 months

And if the prepaid insurance would be $0 so we can assume that the insurance should be reported as $3,480 so that the balance would comes to zero

Hence, the correct option is d. and the same is to be considered

All other options would be wrong