What Is the Proper Adjusting Entry at December 31, the End

Multiple Choice

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

A) Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
B) Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
C) Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
D) Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.
E) Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.