What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $8450 before adjustment, and the unexpired amount per analysis of policies is $3600?
A. Debit Cash, $8450; Credit Prepaid Insurance, $8450.
B. Debit Prepaid Insurance, $4850; credit Insurance Expense, $4850.
C. Debit Insurance Expense, $4850; credit Prepaid Insurance, $4850.
D. Debit Insurance Expense, $3600; credit Prepaid Insurance, $3600.
E. Debit Insurance Expense, $8450; credit Prepaid Insurance, $8450.
Answer: C
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