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).