Problem 1: 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.
Prepare adjusting entry for prepaid expense
Problem 2:
Using the data in above qustion, journalize and post the entry on July 1 and the adjusting entry on December 31 for Pizner Insurance Co. Pizner uses the accounts Unearned Insurance Revenue and Insurance Revenue.