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Question(s) / Instruction(s):

On June 30, 2009 Catherine Co. paid $6,000 cash for management services to be performed over a two-year period. Catherine follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On June 30, 2009 Catherine should record:

a)            A debit to Cash for $6,000

b)            A credit to a prepaid expense for $6,000.

c)            A debit to an expense for $6,000.

d)            A credit to an expense for $6,000.

e)            A debit to a prepaid expense for $6,000.

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