Eastern Industries has prepaid its insurance expense for the entire fiscal year on June 1. Under the cash basis of accounting, Eastern will\ record the cost in the current period but not recognize it as an expense unless it files a claim with the insurance company and receives a benefit.\ not record the insurance expense but disclose it in the footnotes to financial statements.\ allocate the cost of the insurance evenly over 12 months.\ recognize the entire year's insurance expense in the month of June.

Eastern Industries has prepaid its insurance expense for the entire fiscal year on June 1. Under the cash basis of accounting, Eastern will record the cost in the current period but not recognize it as an expense unless it files a claim with the insurance company and receives a benefit. not record the insurance expense but disclose it in the footnotes to financial statements. allocate the cost of the insurance evenly over 12 months. recognize the entire year's insurance expense in the month of June