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    Adjusting entry for prepaid expense

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    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.

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    In the books of Orlow Co.
    Journal entries
    Date ...

    Solution Summary

    Solution contains adjusting entry for prepaid expense.