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Question - On July 1,20A, Hale Company paid a two-year insurance premium. On that date the following journal entry was made:
Prepaid insurance 3,600
Cash 3,600
The annual accounting period ends on December 31.
A. How much of the premium should be reported as expense on the 20A income statement?
B. What is the amount of prepaid insurance which should be reported on the balance sheet at December 31, 20A?
C. Give the adjusting entry that should be made on December 31, 20A.
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