1. Blue Company purchased an insurance policy on March 1, 2019 and it will cover 12 months, of fire and flood damage. The cost was $75,000. The year-end is December 31, 2019. What will the journal entry at December 31, 2019 include?
   1. A credit to Prepaid Insurance of $56,250
   2. A debit to Insurance Expense of $62,500
   3. A debit to Insurance Expense of $12,500
   4. A credit to Prepaid Insurance of $75,000

2. Which of the following items is most likely to be included in S, G and A Expense?
   1. the cost of inventory sold
   2. the cost of income taxes
   3. the cost of the legal department
   4. the cost of factory equipment