Debit Credit Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. Adjusting Entry Insurance expense Prepaid insurance 3,800 3,800 b. Prepaid Insurance. The Prepaid Insurance account has a $5,890 debit balance at the start of the year. A review of insurance policies shows $1,040 of insurance has expired by year-end. DR or CR? 5,890 Debit Step 1: Determine what the current account balance equals. $ Prepaid insurance 5,890 5,890 Step 2: Determine what the current account balance should equal. S 0 Debit Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. 5,890 Insurance expense Prepaid insurance 5,890 ces c. Prepaid Rent. On September 1 of the current year, the company prepaid $24,000 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $24,000. 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