A company pays an annual insurance premium. On 1 September 20X7 it paid $6,000 for the 12 months ended 31 August 20X8. On 1 September 20X8 it paid $7,200 for the 12 months ended 31 August 20X9. 1) What is the cost of insurance for the year ended 31 December 20X8? a) $4,000 b) $5,000 Le) $6,400 d) $6,800 2) What will appear in the company's Statement of Financial Position as at 31 December 20X8 in respect of insurance? a) Accrual $2,400 b) Accrual $4,800 c) Prepayment $2,400 d) Prepayment $4,800