单选题
On January 1,2007, Omega Corporation paid $45000 to renew its property insurance for 3 years. What amount of insurance expense should Omega report for the year-ended December 31, 20×7 and what is the balance of Omega' s prepaid insurance account on December 31,20×8 ? Insurance expense Prepaid insurance ①A. $15000 $ 30000 ②B. $15000 $15000 ③C. $ 45000 $15000
【正确答案】
B
【答案解析】At the beginning of 20×7, the prepaid insurance account (asset) will have a balance of $ 45000. Insurance expense will be recognized at a rate of $15000 per year. At the end of 20 ×8, one year' s insurance remains; thus, the balance of the prepaid insurance account will equal $15000 ( $ 45000 beginning balance $15000 insurance expense for 20×7 $15000 insurance expense for 20×8).