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On October 1,20X1, a firm purchased a 1-year insurance policy for $2,400 and...

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Accounting

On October 1,20X1, a firm purchased a 1-year insurance policy for $2,400 and paid the full premium in advance. The adjustment needed on December 31,20X1, to report the amount of insurance that had expired, would be:
Multiple Choice
a debit to Prepaid Insurance for $600 and a credit to Insurance Expense for $600.
a debit to Insurance Expense for $600 and a credit to Prepaid Insurance for $600.
a debit to Insurance Expense for $2,400 and a credit to Cash for $2,400.
a debit to Insurance Expense for $1,800 and a credit to Prepaid Insurance for $1,800.

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