The company ABC Inc. paid, on June 1, X1, $ 12,000 for a 6 month insurance covering its warehouse (insurance coverage starting on July 1, X1). The entire amount in question has been recorded by the accountant in the Insurance charges account. Based on this information, what is the problem that the accountant will need to correct in order to present the financial statements for the period ended December 31 X1.

Insurance charges prepaid at December 31, X1 are overstated. none of these answers Insurance charges prepaid at December 31, X1 are understated. X1's insurance charges are overvalued.