Brad operates a storage business on the accrual method. on july 1 brad paid $48,000 for rent on his storage warehouse and $18,000 for insurance on the contents of the warehouse. the rent and insurance covers the next 12 months. what is brad's deduction for the rent and insurance?
a. $48,000 for the rent and $18,000 for the insurance. b. $24,000 for the rent and $18,000 for the insurance. c. $24,000 for the rent and $9,000 for the insurance. d. $48,000 for the rent and $9,000 for the insurance. e. none of these is true.

B. $24,000 for the rent and $18,000 for the insurance.

Step-by-step explanation:

Accrual method is a way of recording accounting transactions for revenue based on the time when they are earned and when the expenses are incurred.

Here, in the given scenario, $24,000 is accrued or $2000 per month is accrued.

The payment for insurance or rent spans for 2 time periods. That is six  months this year and six months next year.

We know that insurance is a type of payment liability and accrues only when its paid.

So, he answer here will be option B.

honesty mood

step-by-step explanation:

step-by-step explanation: