Question

Eve's Apples opened for business on January 1, 2021, and paid for two insurance policies effective that date. The liability policy was $52,200 for 18 months, and the crop damage policy was $26,400 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2021

Answer 1

$20,600

Step-by-step explanation:

Computation of prepaid insurance

Insurance 1 ($52,200 * 6/18) $17,400

Insurance 2 ($26,400 * 12/24) $13,200

Total Prepaid Insurance $20,600