Hall Company purchased a two-year insurance policy on December 31, 2011, for $4,000.

During 2012, Hall Company used up half of this insurance protection, thereby incurring $2,000 of insurance expense. The effect on the accounts in 2012 is a decrease in the asset Prepaid Insurance and an increase in Insurance Expense. Record the journal entry for 2012.

Dr. . . . . . . . ____ Cr. . . . . . . . . . ____ On December 31, 2012, the balance in the asset account, Prepaid Insurance, was $ ______ .