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Murphy, Inc. prepaid $8,400 on October​ 1, 2018 for a one−year insurance premium. Coverage begins October 1. On January​ 1, 2019​ (after December 31​adjustments), the Prepaid Insurance account will have a debit balance of​ ________. (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ number.)

A. $9,100
B. $7,000
C. $8,400
D. $6,300

Respuesta :

Answer:

Prepaid Insurance premium = $6300

so correct option is D. $6,300

Explanation:

given data

prepaid insurance premium = $8,400

time = 1 year

to find out

prepaid insurance balance on January 1, 2019

solution

so we get here prepaid insurance balance January 1, 2019 that is express as

Prepaid Insurance premium = prepaid premium × time period .........1

here we know january to september is 9 month

so

Prepaid Insurance premium = $8400 × [tex]\frac{9}{12}[/tex]

Prepaid Insurance premium = $6300

so correct option is D. $6,300

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