On january 15, Collins paid $1,000 in insurance premiums for a two-month policy covering January 15 to March 15. The payment was initially recorded to Prepaid Insurance. Approximately how much should be reported on the income statement for the month of January and January 31 balance sheet, respectively?

A. Insurance expense of $250 on income statement.

B. Prepaid Insurance of $750 on balance sheet.

C. Both a. and b.

D. None of the above.