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On 1.1.2020, MADA co. paid $4,000 in advance for insurance, the insurance policy will cover...

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Accounting

On 1.1.2020, MADA co. paid $4,000 in advance for insurance, the insurance policy will cover two years. If you knew that Mada prepares annual financial statements, the adjusting entry on 31.12.2020 would be:O a. Dr insurance expense 2,000; Cr prepaid insurance 2,000.O b. Dr prepaid insurance 4,000; Cr cash 4,000.Oc. Dr prepaid insurance 2,000; Cr insurance expense 2,000.O d. Dr insurance expense 4,000; Or prepaid insurance 4,000.

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