On July 1,a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date.What will be the insurance expense on the annual income statement for the first year ended December 31?

A) $1,200.
B) $2,400.
C) $1,000.
D) $400.
E) $1,400.

Insurance Premium

The amount paid periodically to an insurer by the insured for covering their risk.

Insurance Expense

The cost recognized in accounting for premiums paid on insurance policies, which protect the company's assets or activities.

Annual Income Statement

A financial statement that summarizes the revenues, costs, and expenses incurred over a fiscal year, showing the company's annual profit or loss.