On July 1, a company paid the 4,080 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? Multiple Choice 1,700. 4,080. 3,060. 1,020. 2,040.

To determine the insurance expense on the annual income statement for the first year ended December 31, we need to calculate the portion of the insurance premium that applies to the period from July 1 to December 31.<br /><br />The total premium paid is $4,080 for one year (12 months).<br /><br />First, let's find the monthly insurance expense:<br />\[<br />\text{Monthly insurance expense} = \frac{\$4,080}{12} = \$340<br />\]<br /><br />Next, we need to calculate the expense for the period from July 1 to December 31, which is 6 months:<br />\[<br />\text{Insurance expense for 6 months} = \$340 \times 6 = \$2,040<br />\]<br /><br />Therefore, the insurance expense on the annual income statement for the first year ended December 31 is:<br />\[<br />\$2,040<br />\]<br /><br />The correct answer is:<br />\[<br />\$2,040<br />\]