Acontract in which the vendor (seller) agrees to convey the title to the real property after the vendee (buyer) has met certain named conditions, and which does not require conveyance within one year, is ordinarily used in the case of a buyer who can only make a small down payment and monthly installments. this type of contract, because it holds disadvantages for both the seller and the buyer, is no longer a popular financing instrument in california.

Wilson company paid $5,000 for a 4-month insurance premium in advance on november 1, with coverage beginning on that date. the balance in the prepaid insurance account before adjustment at the end of the year is $5,000, and no adjustments had been made previously. the adjusting entry required on december 31 is: (a) debit cash. $5,000: credit prepaid insurance. $5,000. (b) debit prepaid insurance. $2,500: credit insurance expense. $2500. (c) debit prepaid insurance. $1250: credit insurance expense. $1250. (d) debit insurance expense. $1250: credit prepaid insurance. $1250. (e) debit insurance expense. $2500: credit prepaid insurance. $2500.