Question 5 (0.5 points) On February 15, Smart Inc. paid $7,200 for a one-year insurance policy that starts on March 1. What is the adjustment that is made on March 31? Increase prepaid insurance and decrease cash by $7,200 each Decrease prepaid insurance and decrease retained earnings by $600 each Decrease prepaid insurance and increase retained earnings by $600 each Increase insurance expense and decrease cash by $7,200 each Question 6 (0.5 points) What is the transaction when a company purchases equipment on account? Increases Equipment; decreases Cash Increases Equipment; increases Accounts Payable Increases Equipment; decreases Retained Earnings Increases Cash; decreases Equipment