Homework Answers
Liability Policy - 72,000
Durartion-18 Months
Therefore, Monthly Insurance charge is 4,000.
Hence Prepaid Entry need to be considered as on 31st Dec'20 for 6 Months
Prepaid Insurance (Liability Policy) = 24,000
Fire damage Policy - 36,000
Duration- 24months
There,fore Monthly Insurance charge is 2,000
Hence Prepaid Entry need to be considered as on 31st Dec'20 for 12 Months
Prepaid Insurance (Fire Damage Policy) = 24,000
Balance in Prepaid Insurance Account will be 24,000 + 24,000 = 48,000 as on 31st Dec'20
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