Prepaid insurance had a balance of $300 on the company’s December 31, 2010 balance sheet. On June 1, 2011, the company paid an additional insurance premium of $1,200. Prepaid insurance had a balance of $700 on the company’s December 31, 2011 balance sheet. How much insurance expense will be reported on the company’s income statement for the year ended December 31, 2011?
a. $400
b. $1,200
c. $500
d. $800