The premium on a three-year insurance policy expiring on December 31, 2018 was paid in total on January 1, 2016. Assuming that the original payment was recorded as a prepaid asset, how would each of the following be affected in 2018? a. No change in prepaid assets; increase in expenses b. No change in prepaid assets; no change in expenses c. Decrease in prepaid assets; no change in expenses d. Decrease in prepaid assets; increase in expenses

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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The premium on a three-year insurance policy expiring on December 31, 2018 was paid in total on January 1, 2016. Assuming that the original payment was recorded as a prepaid asset, how would each of the following be affected in 2018?
a. No change in prepaid assets; increase in expenses
b. No change in prepaid assets; no change in expenses
c. Decrease in prepaid assets; no change in expenses
d. Decrease in prepaid assets; increase in expenses
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