$3000 is the amount of expense to be recorded at the end of the month of March in the prepaid insurance balance.
The amount that represents 6 months of advance payment for the insurance account is a balance of $6000. This means that the insurance was using approximately $1000 for every month, when the balance was supposed to be divided equally. This then implies that the amount of advance payment in the company per month must be the same for all months.
Note that the amount of expense at the end of each month i.e. total amounts of $6000 / 6 = $1000. Therefore, at the end of each month, the expense recorded would be $100 which will end in the month of June in the same year. The amount of expense in the month of March can also be represented by dividing the total number of months by the number of month of March. The results bring up the same amount of expenses incurred in month of March.
Expense recorded in the month of March
( Total amounts of all months )
The number of the month
= $6000 / 3
= $3000
In conclusion, the expense of the insurance at the end of the month of March is recorded to be $3000; this is because since the amount of the expense was amounting to $6000 in six months so in three months it will amount to $3000 (Bharadwaj et al., 2013). The amount was basically representing the equal expense, which was incurred in the month of March. According to my analysis, the company was equally recording the same amount of advance payment in all the six months.
References
Bharadwaj, A., El Sawy, O.A., Pavlou, P.A., & Venkatraman, N.V. (2013). Digital business strategy: toward a next generation of insights. MIS Quarterly, 37(2), 471-482.
Kalpakjian, S., & Schmid, S.R. (2014). Business finance and technology. In S. Kalpakjian, S.R. Schmid, and K.S.V. Sekar (Ed.). Manufacturing engineering and technology. 7th ed. (p. 913). Upper Saddle River: Pearson.
