An analysis of Thrift Corp.’s unadjusted prepaid expense account at December 31, 2006, revealed the following:
- An opening balance of $1,500 for Thrift’s comprehensive insurance policy. Thrift had paid an annual premium of $3,000 on July 1, 2005.
- A $3,200 annual insurance premium payment made July 1, 2006.
- A $2,000 advance rental payment for a warehouse Thrift leased for one year beginning January 1, 2007.
In its December 31, 2006 balance sheet, what amount should Thrift report as prepaid expenses?
- $5,200
- $3,600
- $2,000
- $1,600