Question

Eve's apples opened its business on january 1, 2018, and paid for two insurance policies effective that date. The liability policy was $34,200 for 18 months, and the crop damage policy was $14,700 for a two-year term. What is the balance in eve's prepaid insurance as of december 31, 2018

Answer 1

Balance in Prepaid insurance as of December 31 is $18,750

Step-by-step explanation:

Computation of Prepaid Insurance

Insurance 1 ($34,200 * 6/18) $11,400

Insurance 2 ($14,700 * 12/24) $7,350

Total Prepaid Insurance $18,750