3 Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $5,000 debit balance to start the year. A review of Insurance policies shows that $1,050 of unexpired insurance remains at year-end. Prepaid Insurance Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 b. Prepaid Insurance. The Prepaid Insurance account has a 56,100 debit balance at the start of the year. A review of insurance policies shows $1,160 of insurance has expired by year-end. Prepaid Insurance Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal Step 3: Record the December 31 adjusting entry to get from stop 1 to step 2 b. Prepaid Insurance. The Prepaid Insurance account has a $6,190 debit balance at the start of the year. A review of insurance policies shows $1,160 of insurance has expired by year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. Step 2. Determine what the current account balance should equal Step 3. Record the December 31 adjusting entry to get from step 1 to step 2 c. Prepaid Rent. On September 1 of the current year, the company propaid $27,600 for two years of rent for facilities being occupled that day. The company debited Prepaid Rent and credited Cash for $27,600. Prepaid Rent Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal Step 3: Record the December 31 adjusting entry to get from step 1 to step 2