On June 30,2014,Apricot Co

Multiple Choice

On June 30,2014,Apricot Co.paid $5,000 cash for management services to be performed over a two-year period.Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31,2014,for Apricot would include:

A) A debit to Management Services Expense for $1,250.
B) A debit to Prepaid Management Services Expense for $1,250.
C) A credit to Management Services Expense for $3,750.
D) A debit to Prepaid Management Services Expense for $3,750.
E) A credit to Management Services Payable for $1,250.