J Brown Consulting Paid $2,500 Cash for a 5-Month Insurance $\begin{array} { | l | r | r | } \hline \text { Irsurarice Expense } & 2,500 & \\\hline \text { Cash } & & 2,500 \\\hline\end{array}$

question 18

Multiple Choice

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record the cash payment. Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

• A) \(\begin{array} { | l | r | r | }
• \hline \text { Irsurarice Expense } & 2,500 & \\
• \hline \text { Cash } & & 2,500 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,500 & \\
• \hline \text { Irnsurance Expense } & & 2,500 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,500 & \\
• \hline \text { Prepaid Irsurarace } & & 2,500 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | l | r | r | }
• \hline \text { Prepaid Irsurance } & 2,500 & \\
• \hline \text { Cash } & & 2,500 \\
• \hline
• \end{array}\)
• E) \(\begin{array} { | l | r | r | }
• \hline \text { Irsurarice Expense } & 2,500 & \\
• \hline \text { Prepaid Irsurarace } & & 2,500 \\
• \hline
• \end{array}\)

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