**FINANCIAL ACCOUNTING**

^^PLEASE DO NOT COPY FROM OTHERS^^

Builder Inc had prepaid insurance of $1,600 on January 1, 2020. The opening balance relates to a 12-month insurance policy purchased on March 1, 2019 for $9,600. On March 1, 2020 the company purchased more insurance coverage by paying $10,800 for a new 1-year policy. The company's year ends on December 31, 2020 and all adjustments for the whole year are made on that date so that financial statements can be prepared. a) What amount should appear on the December 31, 2020 balance sheet as prepaid insurance? b) What amount should be reported on the year ended December 31, 2020 income statement as insurance expense