Acc202-On July 1, 2006, Orlow Co. pays $12,000 to Pizner Insurance Co. for a 3-year insurance…

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.