Question

On May 1, a two-year insurance policy was purchased for $9,600 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?

Answer 1

amount of insurance expense = $3200

Step-by-step explanation:

given data

policy purchased = $9,600

to find out

What is the amount of insurance expense that would appear on the company's income

solution

we know insurance purchased on 1 may at $9600

and at statement 31st December is

time is may to December is = 8 month

so for 2 year insurance = 24 months

so

amount of insurance expense =
`(9600)/(24) 8`

amount of insurance expense = 400 × 8

amount of insurance expense = $3200