TRANSACTION ANALYSIS: Below are selected business transaction that occurred during 2018 for Reading Railroad Construction Company. Reading Railroad sells replacement parts and railroad cars in the transportation industry. Please record the following journal entries.

Note: Journal entries that share the same number (1A, 1B, 1C, etc.) are related to each other.

Q28. Transaction 3- September 1, 2018: Reading Railroad purchased 18-month insurance policy (effective 9/1/2018 through 2/28/2020) for $7,200 cash. The transaction to record the purchase of the insurance policy should be:

	A.	Debit: Insurance Expense; Credit: Cash.
	B.	Debit: Prepaid Insurance; Credit: Cash.
	C.	Debit: Prepaid Insurance; Credit: Insurance Expense.
	D.	Debit: Cash; Credit: Prepaid Insurance.