On July 1 a business prepaid insurance for the year July 1, 2015 to 30 June 2016 for $2,640 including GST.

On July 1 a business prepaid insurance for the year July 1, 2015 to 30 June 2016 for $2,640 including GST. Choose the correct general journal to record the transaction.

Dr Prepaid Insurance 2,640, Cr GST Clearing 240, Cr Cash 2,400

Dr Cash 2,240, Cr GST Clearing 240, Cr Prepaid Insurance 2,400

Dr Cash 2,400, Dr GST Clearing 240, Cr Prepaid Insurance 2,640

Dr Prepaid Insurance 2,400, Dr GST Clearing 240, Cr Cash 2,640