Malcolm Corporation purchased an insurance policy for three years beginning January 1, Year 2, and recorded the $6,000 premium in the Prepaid Insurance account. What adjusting entry is required to reflect the proper balances, in the insurance-related accounts at year-end, on December 31, Year 2?
a. Insurance Expense 2,000
Prepaid Insurance 2,000
b. Prepaid Insurance 2,000
Insurance Expense 2,000
c. Insurance Expense 4,000
Prepaid Insurance 4,000
d. Prepaid Insurance 4,000
Insurance Expense 4,000
e. Insurance Expense 6,000
Prepaid Insurance 6,000
A
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