On May 1, 2008, a two-year insurance policy was purchased for ($24,000) with coverage to begin immediately.

Question:

On May 1, 2008, a two-year insurance policy was purchased for $$24,000$ with coverage to begin immediately. What is the amount of insurance expense that appears on the company’s income statement for the year ended December 31, 2008?

a. $4,000

b. $8,000

c. $12,000

d. $20,000

e. $24,000

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