Early in 2018, Benton Well Supplies Discovered That a Five-Year

Multiple Choice

Early in 2018, Benton Well Supplies discovered that a five-year insurance premium payment of $50,000 at the beginning of 2015 was debited to insurance expense. The correcting entry would include:

A) A credit to retained earnings of $20,000.
B) A debit to insurance expense of $20,000.
C) A debit to prepaid insurance of $30,000.
D) A debit to prepaid insurance of $50,000.