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The Fireworks Hut paid $18,200 for a one-year insurance policy on January 1 and recorded...

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Accounting

The Fireworks Hut paid $18,200 for a one-year insurance policy on January 1 and recorded the entire amount as prepaid insurance. Before preparing its March 31 financial statements the company should make which of the following adjusting entries?

Select one:

a. debit Prepaid Insurance, $13,650; credit Insurance Expense, $13,650.

b. debit Cash, $9,100; credit Prepaid Insurance, $9,100.

c. debit Cash, $18,200; credit Insurance Expense, $18,200.

d. debit Insurance Expense, $4,550 credit Prepaid Insurance $4,550.

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