Alejandro Consulting Paid $2,500 Cash for a 5-Month Insurance Policy $\begin{array}{|l|r|r|}\hline \text { Insurance Expense } & 2,500 & \\\hline \text { Cash } & & 2,500 \\\hline\end{array}$

Multiple Choice

Alejandro Consulting paid $2,500 cash for a 5-month insurance policy that begins on March 1. Given the choices below, determine the general journal entry that Alejandro Consulting will make to record the cash payment. Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

A) $\begin{array}{|l|r|r|}\hline \text { Insurance Expense } & 2,500 & \\\hline \text { Cash } & & 2,500 \\\hline\end{array}$
B) $\begin{array}{|l|r|l|}\hline \text { Cash } & 2,500 \\\hline \text { Insurance Expense } && 2,500 \\\hline\end{array}$
C) $\begin{array}{|l|r|}\hline \text { Cash } & 2,500 \\\hline \text { Prepaid Insurance } & 2,500\\\hline \end{array}$
D) $\begin{array}{|l|r|r|}\hline \text { Prepaid Insurance } & 2,500 & \\\hline \text { Cash } & & 2,500 \\\hline\end{array}$
E) $\begin{array}{|l|r|r|}\hline \text { Insurance Expense } & 2,500 & \\\hline \text { Prepaid Insurance } & & 2,500 \\\hline\end{array}$