On March 1, 2003, a company paid a $16,200 premium on a 36-month insurance policy for coverage
Beginning on that date. Refer to that policy and fill in the blanks in the following table:

Balance Sheet Insurance Asset Using Insurance Expense Using
Accrual Cash Accrual Cash
Basis Basis Basis Basis
Dec. 31, 2003 $_______ $_______ 2003 $_______ $_______
Dec. 31, 2004 _______ _______ 2004 _______ _______
Dec. 31, 2005 _______ _______ 2005 _______ _______
Dec. 31, 2006 _______ _______ 2006 _______ _______
Total $_______ $_______

Check 2005 insurance expense:
Accrual, $5,400; Cash, $0. Dec. 31, 2005,
Asset: Accrual, $900; Cash, $0.

The Cash entry only appears in the year ended
December 2003. Insurance Expense $16,200.

##############################

The Accrual entries are used from the following :-


On March 1, 2003, a company paid a $16,200
premium on a 36-month insurance policy for coverage
beginning on that date.

Allocation of $16,200 over 36 months.
16,200/36 = 450 a month

date
200303 1 450
200304 2 450
200305 3 450
200306 4 450
200307 5 450
200308 6 450
200309 7 450
200310 8 450
200311 9 450
200312 10 450

year 2003 10 4500

200401 1 450
200402 2 450
200403 3 450
200404 4 450
200405 5 450
200406 6 450
200407 7 450
200408 8 450
200409 9 450
200410 10 450
200411 11 450
200412 12 450

year 2004 5400

200501 1 450
200502 2 450
200503 3 450
200504 4 450
200505 5 450
200506 6 450
200507 7 450
200508 8 450
200509 9 450
200510 10 450
200511 11 450
200512 12 450

year 2005 5400

200601 1 450
200602 2 450

year 2006 900

You are quite correct in your assumptions.