On 1 July 2017, LMZ Traders Paid $12,000 in Insurance

Multiple Choice

On 1 July 2017, LMZ Traders paid $12,000 in insurance premiums for coverage for the next three years. The insurance expense that will appear in the income statement and the amount of prepaid insurance in the statement of financial position for the year ended 30 June 2018, respectively, are:

A) $6,000 and $3,000.
B) $9,000 and $0.
C) $3,000 and $6,000.
D) $4,000 and $8,000.