b.

An analysis of the company's insurance policies provided the following facts.

Policy Date of Purchase Months of Coverage Cost

A April 1, 2010 24 $ 15,840

B April 1, 2011 36 13,068

C August 1, 2011 12 2,700

The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)