Murphy Company Prepaid $8,400 on October 1,2018 for a One-Year

question 14

Multiple Choice

Murphy Company 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) $7,000
• B) $9,100
• C) $8,400
• D) $6,300

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Definitions:

Securities

Securities that signify either an equity stake in a publicly listed company, a debt interest in a corporation or government entity, or entitlements to ownership through options.

Floatation Costs

The comprehensive expenses involved in releasing new securities, encompassing fees for underwriting, legal services, and registration.

Firm Commitment

An underwriting agreement in which an underwriter agrees to buy all the unsold shares in an initial public offering (IPO).

Underwriter

A person or institution that assesses and accepts the risk on investments, insurance, or securities, often by buying or guaranteeing them.