On December 1, Year 1, a company paid an $19,800 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table. Balance SheetIncome StatementPrepaid InsuranceInsurance ExpenseAccrual BasisCash BasisAccrual BasisCash BasisDecember 31, Year 1Year 1December 31, Year 2Year 2December 31, Year 3Year 3December 31, Year 4Year 4Total$$

There are Two Methods of Accounting, Cash basis of accounting - As per the cash basis of accounting…

Balance Sheet Income Statement Prepaid Insurance Insurance Expense Accrual Basis Cash Basis Accrual Basis Cash Basis December 31, Year 1 Year 1 December 31, Year 2 Year 2 December 31, Year 3 Year 3 December 31, Year 4 Year 4 Total 2$ 24

Balance Sheet Income Statement Prepaid Insurance Insurance Expense Accrual Basis Cash Basis Accrual Basis Cash Basis December 31, Year 1 Year 1 December 31, Year 2 Year 2 December 31, Year 3 Year 3 December 31, Year 4 Year 4 Total 2$ 24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On December 1, Year 1, a company paid an $19,800 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table.

Balance Sheet
Income Statement
Prepaid Insurance
Insurance Expense
Accrual Basis
Cash Basis
Accrual Basis
Cash Basis
December 31, Year 1
Year 1
December 31, Year 2
Year 2
December 31, Year 3
Year 3
December 31, Year 4
Year 4
Total
$
$

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