The company prepaid $3,000 cash for insurance on December 20, 2019 for insurance coverage January, February and March 2020. Record the transaction that would be recorded in December.

1. How would this impact net income? state increase or decrease and amount or NA (example: increase 10,000)

2. How would this impact the cash (bank) account? state increase or decrease and amount or NA (example: decrease 10,000)

3. What type of cash flow activity would it be on the cash flow statement? put OA, IA, FA, or NA (example: OA)

• OA= operating activity
• IA= investing activity
• FA=financing activity
• NA= not applicable