Insurance policies are generally paid at policy inception. However, the premium has not yet been earned by the insurance company. Therefore, it will be a liability on the balance sheet. The premium of $120,000 is paid on Jan 1, 2011 and it covers until Jan 1, 2012. What is the earned premium on April 1, 2011? $40,000 $30,000 $60,000 $10,000