=+EX 3-5 Effect of omitting adjusting entry objs. 2, 3 Chapter 3 The Adjusting Process 129 The balance in the prepaid insurance account, before adjustment at the end of the year, is $11,500. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:

(a) the amount of insurance expired during the year is $8,750;

(b) the amount of unexpired insurance applicable to future periods is $2,750.