For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31 . 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. Assume no other adjusting entries are made during the year. . Prepaid insurance. The Prepaid Insurance account has a $6,590 debit balance at the start of the year. A review of insurance olicies shows $1,320 of insurance has expired by year-end