Coverage has begun, so the company has a future coverage asset and an obligation to pay the insurer.
No coverage period has elapsed on the effective date, so recording the full policy as current expense is unsupported.
The payment is due later, so Cash has not changed on the coverage date.
The company has received the policy coverage right and owes the supported premium before payment.
Answer: A
DebitCredit Debit: Prepaid Insurance $6,000 Credit: Accounts Payable $6,000 Maple Events records the future coverage as Prepaid Insurance and records the amount owed as Accounts Payable. The entry debits Prepaid Insurance and credits Accounts Payable for $6,000.