Eve's apples opened for business on january 1, 2018, and paid for two insurance policies effective that date. the liability policy was $36,000 for 18 months, and the crop damage policy was $12,000 for a two-year term. what was the balance in eve's prepaid insurance account as of december 31, 2018?

18,000

Explanation:

Liability policy:

                                                            = 2,000

Insurance expense 2018:

= No. of months from 1 Jan 2018 to 31 Dec 2018 × Insurance expense per month

= 12 × 2,000

= 24,000

Prepaid insurance balance for liability policy on 31 Dec, 2018:

= Prepaid Insurance for liability policy - Insurance expense 2018

= 36,000 - 24,000

= 12,000

Crop damage policy:

                                                            = 500

Insurance expense 2018:

= No. of months from 1 Jan 2018 to 31 Dec 2018 × Insurance expense per month

= 12 × 500

= 6,000

Prepaid insurance balance for crop damage policy on 31 Dec, 2018:

= Prepaid Insurance for crop damage policy - Insurance expense 2018

= 12,000 - 6,000

= 6,000

Therefore,

Total prepaid insurance balance on 31 Dec 2018:

= Prepaid insurance balance for liability policy on 31 Dec, 2018 + Prepaid insurance balance for crop damage policy on 31 Dec, 2018

= 12,000 + 6,000

= 18,000

answer; false pretense;