Arid Company Paid $1,704 on June 1,2013,for a Two-Year Insurance

Multiple Choice

Arid Company paid $1,704 on June 1,2013,for a two-year insurance policy and recorded the entire amount as Insurance Expense.The December 31,2013,adjusting entry is

A) debit Prepaid Insurance and credit Insurance Expense,$497.
B) debit Insurance Expense and credit Prepaid Insurance,$497.
C) debit Insurance Expense and credit Prepaid Insurance,$1,207.
D) debit Prepaid Insurance and credit Insurance Expense,$1,207.