On April 1, Year 1, Colonial Bookstore Bought an Insurance

Multiple Choice

On April 1, Year 1, Colonial Bookstore bought an insurance policy costing $24,000 that would insure the retail building for two years against fire loss.What asset account and what amount are recorded on the balance sheet at December 31, Year 1?

A) Prepaid Insurance, $15,000
B) Insurance Expense, $15,000
C) Prepaid Insurance, $9,000
D) Insurance Expense, $9,000
E) Prepaid Insurance, $12,000