QS 3-21A Preparing adjusting entries LO P7 Garcia Company had the following selected transactions during the year. Book Jan. 1 The company paid $6,200 cash for 12 months of insurance coverage beginning immediately. Aug 1 The company received $2,700 cash in advance for 6 months of contracted services beginning on August 1 and ending on January 31. Dec. 31 The company prepared any necessary year-end adjusting entries related to insurance coverage and services performed. a. Record journal entries for these transactions assuming Garcia follows the usual practice of recording a prepayment of an expense in an asset account and recording a prepayment of revenue received in a liability account. rences b. Record journal entries for these transactions assuming Garcia follows the alternative practice of recording a prepayment of an expense in an expense account and recording a prepayment of revenue received in a revenue account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)