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

question 148

Multiple Choice

Alejandro Consulting paid $2,500 cash for a 5-month insurance policy that begins on March 1. Given the choices below, determine the general journal entry that Alejandro 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) \(\begin{array}{|l|r|r|}
• \hline \text { Insurance Expense } & 2,500 & \\
• \hline \text { Cash } & & 2,500 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|l|}
• \hline \text { Cash } & 2,500 \\
• \hline \text { Insurance Expense } && 2,500 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|}
• \hline \text { Cash } & 2,500 \\
• \hline \text { Prepaid Insurance } & 2,500\\\hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Prepaid Insurance } & 2,500 & \\
• \hline \text { Cash } & & 2,500 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|r|}
• \hline \text { Insurance Expense } & 2,500 & \\
• \hline \text { Prepaid Insurance } & & 2,500 \\
• \hline
• \end{array}\)

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Definitions:

Factor

A number or algebraic expression that divides another number or expression evenly—i.e., without leaving a remainder.

Missing

Something that is lost or absent, especially a piece of information that is not available.

Factoring

The process of breaking down an expression into a product of simpler expressions, often used to simplify expressions or solve equations.

Integers

Whole values including positive, negative, and zero without any fractions or decimals fall under the category of integers.