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43. Your company, which uses accrual basis accounting, pays $18,000 in advance to cover a 3-year insurance premium and debits Prepaid Insurance. How much insurance expense has your company incurred after 1 year has elapsed? a. $18,000 b. $12,000 c. $6,000 d. $0 Use the following information for Questions 44 and 45: Your company shows the following data at the end of its first year: Credit sales for the year Accounts Receivable balance Allowance for Doubtful Accounts $1,000,000 100,000 4,000 credit balance 44. If bad debt is estimated as 1% of credit sales, the adjusting entry for bad debt expense includes a debit for... a. $14,000. b. $10,000. c. $6,000. d. $0. 45. If your company estimates that it will not collect 5% of its accounts receiv- able, the year-end adjustment to Allowance For Doubtful Accounts will be a. a credit of $1,000. b. a credit of $5,000. c. a debit of $1,000. d. a debit of $5,000. 46. If December 1, your company opens for business and leases space in a building for $1,000 per month and pays 3 months' rent in advance. On December 31, the balance in Rent Expense is $3,000, it means that the advance payment for rent was recorded in ... a. Prepaid Rent, which must now be credited for $1,000. b. Rent Expense, which must now be credited for $2,000. c. Prepaid Rent, which must now be debited for $1,000. d. Rent Expense, which must now be debited for $2,000

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