Assume that $$18,400$ cash is paid for insurance to cover the next year. The appropriate debit and credit would be:

Multiple Choice

Debit Prepaid Insurance $$18,400,$ credit Insurance Expense $$18,400.$

Debit Cash $$18,400,$ credit Prepaid Insurance $$18,400.$

Debit Prepaid Insurance $$18,40,$ credit Cash $$18,40.$

Debit Insurance Expense $$18,400,$ credit Prepaid Insurance $$18,400.$