A calendar year company paid $24,000 on October 1, 2012 to purchase two years of insurance coverage for its retail shop. The prepayment was initially recorded as an asset.

A.) What adjusting journal entry is necessary at December 31st, 2012?

B.) How much will be reported on the balance sheet at December 31st, 2012 for prepaid insurance?

C.) How much will reported on the income statement at December 31st, 2012 for insurance expense?

D.) What adjusting journal entry is necessary at December 31, 2013?

E.) How much will be reported on the balance sheet at December 31,2013 for prepaid insurance?

F.) How much wil be reported on the income statement at December 31, 2013 for insurance expense?