On January 1, 20X1, Thomas Company paid $1,000 for a two-year insurance policy on the building. The accounting period ends December 31. At the end of 20X1, the financial statements should report which of the following?

On the Statement of Financial PositionOn the Statement of EarningsA.Prepaid insurance, $0Insurance expense, $1,000B.Prepaid insurance, $250Insurance expense, $250C.Prepaid insurance, $500Insurance expense, $500D.Prepaid insurance, $1,000Insurance expense, $0

Which option would it be?