A policyholder on day 1 her policy pays is her first premium payment. How is the transaction recorded?

a. premiums written on the income statement increases by the amount collected and premiums earned on the income statement decreases.

b. premiums receivable decrease on the balance sheet by the amount collected and cash account on the income statement increases.

c. cash account on income statement increases by the amount collected, and premiums receivable on the balance sheet decrease

d. Premiums earned on the income statement increases by the amount collected and premiums receivable on the balance sheet decreases