On August 1, Covington Motors pays £18,000 for insurance coverage for the next 12 months. On August 1, the firm records the following journal entry:
a. Prepaid Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Insurance Expense . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 18,000
b. Prepaid Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
c. Insurance Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
d. Liability for Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
e. Prepaid Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 18,000
Liability for Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 18,000
B
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