A business had an inexperienced bookkeeper. During the first two weeks on the job, the bookkeeper made a mistake while recording a journal entry. The business paid $2,100 for next years insurance. The bookkeeper debited insurance expense for $1,200 and credited $1,200 to Cash. What is the correcting entry?

Select one:

a. Debit prepaid insurance, $2,100; Credit insurance expense, $1,200; and Credit Cash, $900

b. Debit insurance expense, $2,100; Credit prepaid insurance, $1,200; Credit Cash, $900

c. Debit insurance expense, $1,200; Debit prepaid insurance, $900; Credit Cash, $2,100

d. Debit prepaid insurance, $1,200; Debit insurance expense, $900; Credit Cash, $2,100