Doug Paid $1,200 on a One-Year Insurance Policy on March

Multiple Choice

Doug paid $1,200 on a one-year insurance policy on March 1.The entry included a debit to Prepaid Insurance.The adjusting entry on December 31 would include a:

A) debit to Prepaid Insurance for $1,000; and a credit to Cash for $1,000.
B) debit to Insurance Expense for $1,000; and a credit to Prepaid Insurance for $1,000.
C) debit to Insurance Expense for $1,200; and credit to Prepaid Insurance for $1,200.
D) debit to Cash for $1,200; and credit to Prepaid Insurance for $1,200.