On July 1, 2006, Orlow Co. pays $12,000 to Pizner Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Orlow Co., journalize and post the entry on July 1 and the adjusting entry on December 31.© BrainMass Inc. brainmass.com June 3, 2020, 7:38 pm ad1c9bdddf
Please see attachment and response provided.
In the books of Orlow Co.
Solution contains adjusting entry for prepaid expense.