On 1 May 2018, a Ltd Pays $9 600 for a One-Year

question 8

Multiple Choice

On 1 May 2018, A Ltd pays $9 600 for a one-year fire insurance policy that expires on 30 April 2019. After the adjusting entry, what would be the balance of prepaid insurance in the balance sheet at 30 June 2018?

• A) $1 600
• B) $8 000
• C) $8 800
• D) None of the above

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