Assume Idaho Company recorded the following adjusting journal entry at year-end:

Insurance expense	$2,500
Prepaid insurance			$2,500

If the beginning balance in prepaid insurance was $500, and $5,000 was paid for an insurance premium during the year, what is the ending balance in the prepaid insurance account after the above adjusting entry?

Multiple Choice

• $2,700.

• $3,000.

• $3,200.

• $4,700.