On January 1, 2020, Peach Company Purchased a Five-Year Insurance

Multiple Choice

On January 1, 2020, Peach Company purchased a five-year insurance policy for $5,000. If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2020 is

A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800
B) Debit Prepaid Insurance, $1,000; credit Insurance Expense, $1,000
C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360
D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360
E) Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000