Don't give answer in image format On July 1 of the current calendar year, Olive Co. paid $8,900 cash for management services to be performed over a two-year period beginning July 1Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 of thecurrent year for Olive would include:Multiple ChoiceA debit to a prepaid expense and a credit to an expense for $2,225.A debit to an expense and a credit to a prepaid expense for $6.675.A debit to an expense and a credit to a prepaid expense for $2,225.A credit to a liability and a debit to a prepaid expense for $2,225A debit to a prepaid expense and a credit to Cash for $6,675.

The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

On July 1 of the current calendar year, Olive Co. paid $8,900 cash for management services to be performed over a two-year period beginnin Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 ar current year for Olive would include: Multiple Choice A debit to a prepaid expense and a credit to an expense for $2.225. A debit to an expense and a credit to a prepaid expense for $6.675. A debit to an expense and a credit to a prepaid expense for $2,225 A credit to a liability and a debit to a prepaid expense for $2,225 A debit to a prepaid expense and a credit to Cash for $6,675