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. b. Prepaid Insurance. The Prepaid Insurance account has a $6,590 debit balance at the start of the year. A review of insurance policies shows $1,320 of insurance has expired by year-end. \begin{tabular}{|l|l|} \hline Step 1: Determine what the current account balance equals. \\ \hline Step 2: Determine what the current account balance should equal. & Debit \\ \hline & Sebit \\ \hline Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. \\ \hline Insurance expense \\ \hline Prepaid insurance \\ \hline \end{tabular} c. Prepaid Rent. On September 1 of the current year, the company prepaid $32,400 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $32,400