Nancy O'Rode Starts a Consulting Business Called EducateMe

question 111

Multiple Choice

Nancy O'Rode starts a consulting business called EducateMe.On May 1,the company paid $1,200 cash for six months of insurance coverage beginning on June 1.How would EducateMe record this transaction?

• A)Debit Cash for $1,200 and credit Prepaid Insurance for $1,200.
• B)Debit Cash for $1,200 and credit Insurance Expense for $1,200
• C)Debit Insurance Expense for $1,200 and credit Cash for $1,200.
• D)Debit Prepaid Insurance for $1,200 and credit Cash for $1,200.
• E)Debit Cash for $1,200 and credit Common Stock for $1,200.