1.Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise, costing $620, and sold on account for $960?

2.On December 31, 2021, Coolwear, Inc. had a balance in its prepaid insurance account of $48,400. During 2022, $86,000 was paid for insurance. At the end of 2022, after adjusting entries were recorded, the balance in the prepaid insurance account was 42,000. Insurance expense for 2022 would be:

		$6,400.
		$134,400.
		$86,000.
		$92,400.