The Prepaid Insurance Account of Megaton Ltd Shows a Balance

Multiple Choice

The prepaid insurance account of Megaton Ltd shows a balance of $1800 (net of GST) representing a payment on 1 July 2014 of a three-year insurance premium.Which of the following is the correct adjusting entry on 31 December 2014,the close of the annual accounting period?
$ $

A) Insurance expense 600 Prepaid insurance 600
B) Insurance expense 300 Prepaid insurance 300
C) Prepaid insurance 300 Insurance expense 300
D) Prepaid insurance 1,500 Insurance expense 1,500