Chapter 3 - Adjustments and Income Measurement Problem 3.1 Payment happens before expense Examine the transaction and book the requested journal entries. Descriptions are not required. (As- sume that the company uses the balance sheet approach and that the initial recording is to an asset account.) a) The company purchased an 18-month insurance policy for $18,000 on June 1, 20X3. GENERAL JOURNAL Date Accounts Debits Credits . Before you continue, answer these questions: How many months does the insurance policy last? How many of those fall into the year 20X3? (count months with your fingers seriously!) Then, how many months will fall into 20X4? What $-value corresponds to the months in 20X3? Then, what $-value is left for the months in 20X4? . b) Year-end adjustment. Remember: If Adjustment then never book Cash! c) When the insurance policy finally expires ... (what is the date?) Now answer these questions: . How much insurance expense was booked in 20X3? How much insurance expense was booked in 20X4? Did these bookings achieve the correct timing of the expenses? (yeso)