Garcia Company had the following selected transactions during the year. a. Record journal entries for these transactions

Question:

Garcia Company had the following selected transactions during the year.

Jan. 1 Aug. 1 The company paid $6,000 cash for 12 months of insurance coverage beginning immediately. The

a. Record journal entries for these transactions assuming Garcia follows the usual practice of recording a prepayment of an expense in an asset account and recording a prepayment of revenue received in a liability account.

b. Record journal entries for these transactions assuming Garcia follows the alternative practice of recording a prepayment of an expense in an expense account and recording a prepayment of revenue received in a revenue account.

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