On Oct 1, Thomas Company paid $20,000 for a one year insurance policy on the plant. The accounting period ends Dec 31. At the end of the year, the financial statements should report:

Balance Sheet; Income Statement

a.) Prepaid insurance $20,000; Insurance Expense $0

b.) Prepaid insurance $0; Insurance Expense $20,000

c.) Prepaid insurance $10,000; Insurance Expense $10,000

d.) Prepaid insurance $5,000; Insurance expense $15,000

e.) Prepaid insurance $15,000; Insurance expense $5,000