Ambassador Hotels purchases one year of fire insurance coverage on December 1 for $24,000 ($2,000 per month), debiting Prepaid Insurance. On December 31, Ambassador would record the following year-end adjusting entry: Transaction Account Title Debit Credit a. Insurance Expense 24,000 Prepaid Insurance 24,000 b. Insurance Expense 2,000 Prepaid Insurance 2,000 c. Insurance Expense 22,000 Prepaid Insurance 22,000 Multiple Choice Option c No entry is required on December 31 because full cash payment was made on December 1 and the Insurance does not expire until the following November 30. Option b Option a