This really is the last question!

Question 24

1. Refer to the trial balance of Morrell, Inc.
   ;
   On July 1, Morrell paid four months in advance for insurance. ; Which of the following is included in the adjusting entry at July 31?

   Choose one answer.

   Morrell, Inc.

   Morrell, Inc. adjusts its books each month but closes its books at the end of the year. The trial balance at July 31 before adjustments is as follows:

   Debit	Credit
   Cash	$12,920
   Accounts Receivable	9,620
   Supplies	1,300
   Prepaid Insurance	3,120
   Equipment	26,000
   Accumulated Depreciation – Equipment	$10,400
   Unearned Service Revenue	6,500
   Capital Stock	7,190
   Retained Earnings	23,400
   Dividends	1,560
   Service Revenue	16,510
   Wages and Salaries Expense	7,800
   Utilities Expense	380
   Rent Expense	1,300
   $64,000	$64,000

   	a.	A credit to Prepaid Insurance for $2,340.
   	b.	A debit to Prepaid Insurance for $780.
   	c.	A credit to Prepaid Insurance for $780.
   	d.	A debit to Prepaid Insurance for $2,340.