A company makes the payment of a one-year insurance premium of $3,312 on March 1,

Use the horizontal model to record the above transaction

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders' Equity

Net Income

=

Revenues

-

Expenses

Cash

=

+

=

-

Interest receivable

=

+

=

-

**f the premium had been $6,624 for a two-year period, how should the prepaid amount at December 31, 2016 be reported on the balance sheet?

Use the horizontal model to show the amount of insurance premium "used" that month

c. Calculate the amount of prepaid insurance that should be reported on the December 31, 2016 balance sheet with respect to this policy_______________

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders' Equity

Net Income

=

Revenues

-

Expenses

Cash

(3,312)

=

Note receivable

+

=

-

Prepaid insurance

250

Prepaid insurance

3,312

=

Prepaid insurance

+

=

-

Cash

250