Blue Company prepares monthly financial statements. Below are listed some selected accounts and their balances in the December 31 trial balance before any adjustments have been made for the month of December. Accounts Receivable $2,700 debit balance Prepaid Insurance 400 debit balance Unearned Fee Revenue _1,200 credit balance Interest Payable 300 credit balance An analysis of the account balances by the company's accountant provided the following additional information. 1. Revenue that has been earned, but not yet billed or recorded amounts to $725. 2. A six month insurance policy was purchased on October 1 for $600. 3. Blue Company signed a $36,000 note payable on October 1. The note is due in six months at an interest rate of 5%. The note and interest are payable on March 1 of next year. 4. The amount of fees previously received in advance that remain unearned at December 31 is $500. Prepare the journal entry to record the adjustment needed due to item 2 - prepaid insurance. Include an explanation